KiwiSaver investors should be able to split up their savings between different funds and providers to diversify, according to a leading investment analyst.
At present investors can switch the type of funds they are in and switch from one provider to another, but it is not possible to be with two different providers.
The government is currently reviewing the default KiwiSaver providers, but no changes to the rules are expected.
Summer KiwiSaver investment committee chairperson Martin Hawes said he would like to see it happen.
“A lot of people ask can they have two funds, and the answer is they can’t, but what they’re really looking for is perhaps being able to diversify KiwiSaver, so they get a bit of management diversification.
“But they sometimes just want to try out a smaller provider to see if it’s better service, see if gives better performance, see if it gives better returns, and I think that’s a good idea.”
The main retail banks had the lions’ share of KiwiSaver and most investors were tied to them, Hawes said.
Given the automation that ran KiwiSaver it would not seem to be a difficult thing to allow or administer, once the law allowed it, he said.
Hawes said there would be value in letting investors experiment and diversify, for instance some providers were better at share investments while others were stronger in fixed interest, and similarly some were better performers in different approaches to investing such as conservative or growth funds.
“Some people now have quite a bit of money in KiwiSaver and the idea of diversifying the management with a couple of different providers is actually a very good one.”