From $0 to $120 Billion: The Evolution of KiwiSaver

July 2027 marks 20 years since KiwiSaver was introduced to New Zealand. In that time, it has grown from a brand-new savings scheme into a $120+ billion investment powerhouse that will likely become the largest asset many Kiwis ever own. 

In this episode, Tim and Brodie look back at how KiwiSaver has evolved since 2007, from the dominance of bank providers to the rise of specialist fund managers, changing investment strategies, and the growing shift toward passive investing. They explore what these trends might tell us about the future of KiwiSaver, including contribution rates, fees, regulation, and whether New Zealand's retirement system is heading for major change. 

If the last 20 years transformed KiwiSaver beyond recognition, what might the next 20 years bring? 

If you have a question, suggestions, or a topic you would like us to cover, please send an email to: podcast@foxplan.nz

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The information shared on The Dollars & Sense Podcast is general in nature and does not consider your individual circumstances. Dollars & Sense exists purely for educational purposes and should not be relied upon to make an investment or financial decision. Tim Ellis (FSP778196) and Brodie Haggerty (FSP778174) are both Financial Advisers providing advice on behalf of FoxPlan Ltd. FoxPlan Ltd (FSP39630) is a licensed Financial Advice Provider. Important information can be found at www.foxplan.nz/disclosure 

Transcript

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July 1, 2007, Kiwi Saver was rolled out to New Zealand. How it looked then, fast forwarding 20 years to how it looks now, vastly different. The landscape is hugely changed. How can we use what it looked like back then and how it's evolved to where it is now to try and get an idea around how it might look in the future? Welcome back to another episode of the Dollars and Cents podcast. This week, you are lucky enough to not only have myself, but Brody Hagerty, my co-host. Welcome back once again. Thank you, Tim. Just before we get underway with this week's episode, as per usual, would you do the honours? Yes. Welcome to this week's episode. Just a gentle reminder that everything we talk about today is general of nature and not intended to be personalized financial advice. So seek the relevant professionals before making your big decisions. Why am I getting uh a deaf stare as you're doing that? Is that begrudgedly? Oh, I'm just pretty sick of compliance, but it's all right. Okay. Maybe we should swap one to. Oh, you're doing great job, mate. Keep it up. Okay, so this week's episode, uh July 1 uh this year will mark 20 years of KiwiSaver being in existence. Uh what it looked like when it came out uh is hugely different to what it looks like now. So we're gonna talk through uh the the journey that KiwiSaver's gone on, uh where it is today and how it's evolved, and perhaps we will try and cast some aspersions as to where it might be in the future. Look, even within the last one year, uh the the landscape of KiwiSaver has is changed quite a lot. Um I I I've prepared a bit of stats to see where the lion's share of the market is. Is that something that you've considered in this week's episode? Yep, it it is. Okay. Have you also taken a look at the the share size of Kiwi Saver? Uh how how how many funds are actually invested in KiwiSaver across New Zealand? Uh, like the the dollar amount. Yeah. 120 billion. It's pretty pretty big and going up at a very, very fast rate. Obviously, due to the fact that most people that are uh uh subscribe to KiwiSaver are actually contributing to it with every single paycheck. Mm-hmm. Have you also have you taken a a look at how the line share is actually shifted? It has shifted, but I think uh still 70% of it or more still sits with the major banks. Yeah. Yeah, surprisingly so. I've got some more detailed stats on that coming up very soon. Yeah. I mean, there has been obviously a shift away from banks slightly, but with with all the the new Kiwi Sabre providers coming out, but the large majority is still with the big banks, ANZ, ASB, BNZ, Westpack. Do you know in other countries that's just mind blowing? Yep. We accept it as the truth and normal, but yeah, mind blowing. Well, a ANZ is the largest provider. Has been. Over 20 billion. Yep. Has been and still is. This is the the same same banks that everyone complains about. Yep. Yeah. Um Australian-owned, by the way. Yeah, yes, yes, yes, as as is the Bank of New Zealand. Um I I I think uh I I want to get into stats. You know I've come to this episode with stats that kind of uh tell a bit of a story, but I I think upon reflection, before diving into some of the stats to uh understand how the landscape is is shifting, the one thing that I I wanted to put out before we go down that road is the very, very obvious. The the number one factor in all growth of all Kiwi Saver funds is asset allocation. Of all the data that I went and looked at and prepared for this week's episode, there was one thing that's clear is that the the more you were invested in growth assets is shares, that that mattered so much more than which provider you're with. Oh, absolutely. Couldn't agree more. Yeah. So, you know, I I think before people start getting down to the semantics of, you know, which which provider should I be with and why and what can I take away from this episode? Sure, those are great things to look at, but is your asset allocation in the right place first? Yeah, I mean you can you can really dot your I's and cross your T's when you're trying to pinch pennies and save a bit of fees here and um get a bit more return there. But fundamentally it comes from the the difference between being in a conservative fund and a high growth fund over ten years is gonna be more than any fee or return via different providers is ever gonna get you? Uh a hundred percent. Again, every single graph that I looked at and needed to use for research for this episode told that exact story. Why don't we begin with this this line share we're which we were just touching on before? Um the the the the three biggest providers when measured by how much they have invested in their KiwiSaver schemes? Uh I know A and Z will be one. Well, try and answer that question by thinking this way Who do you see the most advertising for KiwiSaver funds? I don't watch much TV anymore, Tim, but I'd say it'd be A and Z, B and Z, and maybe ASB. Yep. Close, close. Yeah, you've got you got to swap out B and Z for Westpac. Ah, okay. Yeah. So banks? Banks. All three of them banks. Yeah, there are a few. I have seen more and more um of the smaller brands pop up every now and again, though. I think like your Milford and Kernel. I've seen those those pop up every now and again. Simplicity. Yeah, so that comes into uh what I've been looking at, which is the growth rate of and who's taking the lion share. But the lion share um across those three banks was so big to start that even though other um providers are starting to take up some of that line share, they're still the three biggest uh providers of KiwiSaver. Yeah, well that that's just a testament to the nature of KiwiSaver, right? It's people set it up, and the banks were the ones that were the the initial movers mo mostly, and they were a lot of the default providers, so people just went straight into their default fund, they've never changed it, they've always been able to see it on their app because they're with the same bank. They just never have they've never thought to change, and the all the stats stay that say that most people just stay with their initial provider. Yeah, but why do you think that we're starting to see, and I'll explain the lion share movements. I mean, uh I looked at 2017 to 2025, and I was looking at the movements between lion share. Um ANZ did have 27% of the entire market uh in 2017. Fast forward to uh 2025, they now only have 17%, they've lost 10% of the lion's share. Uh ASB was 20%, um, which was number two, and now they have 15% of the market. So they're still number two with 15%. Um Westpac was 13% of the market, um, which had them as number three, but now they only have nine percent of the market, which actually bumps them all the way down to fifth. And funny enough, a non-bank provider has taken third position. Milford. No. Wow, no, simplicity. Fisher. Fisher funds. Fisher funds. Wow. Hmm. A very large jump in uh 2023. Massive jump in 2023. They have some good returns. Must of. So if we've seen the three banks going down, why do you think that is? I think there's a number of reasons. There is um I think the first one they would have to touch on is that KiwiSaver is no longer an extra savings plan. If you think about people retiring in the last five years, ten years, they've always been quite late. Well, they started when KiwiSaver was there, but by retirement there was only fifty, sixty thousand dollars in there or whatever. Sure. You mean people that um you know only had uh a few more years of work past 2007. Yeah, yeah, yeah. Okay. Yep. Um so they've got to sixty-five and there's fifty thousand dollars in there, or whatever, they've just thought, no, I'll just take it out, buy a boat, buy a jet ski. It's my my treat to myself. Sure. Whereas people our age, younger, people in their 40s, they know that they've got a long time left in the market, and it's not that they're watching those balances grow and they're thinking, well, this isn't just some savings thing that I should ignore. I need to make a conscious decision where this money goes, because it's a lot and it's going to be a lot, and that's only going to keep increasing. Well, just because the amount of money is is more substantial and important, um, why would that mean that it's needed to flow away from where it was? Why have why has that line share gone down? Well, but because if you think about it, there's more information out there, right? So they they know that they need to take more of an effort in figuring out their KiwiSaver. Sure. They've made that first step, right? Okay. And then they say, okay, I'm with a bank. Mm-hmm. And then they say, Well, what else is out there? Why am I with a bank? And then they say, Well, okay, I've just gone on this website and I've compared my fees to someone else's fees, and what they're doing is completely different. Mm-hmm. So they're having those they're starting those questions, right? They're saying, Well, this provider and this bank provider gives me absolutely nothing. They've never called me in my entire life. Um, whereas this provider over here, they have all these things attached to it. They might have a financial advisor attached to it, they've got all these budget-friendly tips, tools, they're charging way less fees. What what am I doing? So they're they're they're opening those conversations. So to to boil that down, you think that non-bank providers charge lower fees? Not necessarily, they just provide different value. So they might charge the same fees even more. But I suggest some of them do. Yeah, yeah. But they're they're either really good at marketing or they're providing a value that the bank isn't. Mm-hmm. Okay. I can accept that. And think think things like um just general consensus towards banks. They might wake up one day and say, I don't really want this sort of money sitting with an Australian bank. Why don't I why don't I invest this with a grassroots New Zealand company? I would have thought that the sentiment towards having a kiwi save off a bank is more safe. Now, I look, I know in reality that's not a a logical thought, but I I do I would have thought that that was the general consensus. Potentially, but New Zealand. Trust a bank, right? Yeah, but New Zealanders aren't dummies. They're doing research on the internet, right? They're not just going bank is safe. If they've got that much money and they know that their portfolio is going to be big over the long run, they get curious, especially younger generations, they're curious what else is out there. There's so many different tools online that you can compare kiwi savers. This one invests in oil and child labor and whatever. You know, that they're they're having those sort of conversations now because it's you reckon investors are looking for funds that can invest in child labor because profits are pretty high? No, I think they're looking they're looking to move away from socially irresponsible funds. Right. I think people are just more curious now because they know that KiwiSaver might be their largest asset in their lifetime. You're not you're still not going to care about it from when you're 20 to 30, probably. No. But 30-year-old plus, they're actually saying, right, this is going to be a main engine, a main driver for my retirement. Should I get some advice on it? Should I look at options elsewhere in the marketplace? You know, they're chatting to their friend who's talking about Milford, they're chatting to their friends who's talking about the lowest fees in the game with simplicity or kernel, you know, that they're having those conversations. Whereas when you've got when you know you're only going to have $50,000 and then you're going to buy a jet ski with it in five years' time, you you don't really care where it is. It's in the bank. I can see it. Yeah, fair. Okay. Um, I I think uh another rationale is just the sheer number of KiwiSaver providers there are now. Yeah. You know, more, more, more options means um that the lion share is going to be split by more players, right? For sure. Mm-hmm. That's an easy way to say it, yeah. Um, and I think some of the aggressive advertising from some of the uh the other providers as well would have a big part to play in it. You would you wouldn't be referring to the sign up to our KiwiSaver and you go on the draw to win $10,000 sort of campaigns? Yep. Or buy a pizza at Pizza Hut and then you Oh yeah. Yeah, there yeah, you get a free uh review of your KiwiSaver and you get an an agent that'll come out and talk to you about it. Is that agent um will they only recommend one company? They will only recommend one company. That's correct. Interesting. Yeah, yeah. Um so I think now that uh the revenue that's been generated off KiwiSaver from from fees has started to make it look like a much more attractive uh product to sell. Yeah, well that's just people are chasing it, yeah, hunting it more aggressively rather than oh well, people usually have the KiwiSaver off their bank or yeah, I mean that's I don't care because it's not a big revenue generator for me. Now you've got advisors that are excited about building big um uh you know, uh books, client books, using KiwiSaver. Well, they're gonna be more actively um trying to uh attract more KiwiSaver members, right? Yeah. Av advisors, yes, but also the the fund managers, right? That that's more so fund managers. That's how capital markets work, right? That there's people making money, so there's a there's demand, will enter the market, and because there's more players in the market, they need to become competitive, and therefore everyone becomes more competitive, right? Because you're fighting over the same same amount of people. Sure. Yeah, can completely agree. And I think that's why we're seeing what we're seeing here with you know the top three providers back in 2017 being Westpac, ANZ, and ASB, um, all decreasing their line share. Yeah, and it's it it's also interesting because back when KiwiSaver first came out, financial advisors didn't typically want to bring on KiwiSaver clients because they saw it as a waste of time. Well, it was uh a lot of time for very little reward. It was new compliance, it was new liability, it was new learning, and for what reward? Yeah, exactly. But now advisors understand the power of how big KiwiSaver is going to be. And if you're in the industry for the next 10, 20, 30 years, ignoring KiwiSaver would be stupid, right? And from my experience, advisors don't typically advise to go put your money with the bank for a Kiwi Saber provider. I've never heard of it. I've never found one financial advisor that uses a bank's Kiwi Saver product. No, I I don't even know if you can, can you? I suppose you could. You can become the servicing advisor for it and give them ongoing advice for this stay there. You can actually, yeah, you're right. Yeah. But it's just not not common, right? Well, I I've only spoken about the uh people losing their their lion share, but do you want to have a guess or a stab at uh which provider has had the biggest gain in lion share over 2017 to 2025? Uh I'd say it'd be either Milted Simplicity or Booster. Okay, so it's one of them and you can only choose one. Uh I didn't ask for the top three, I asked the top one. I'll go with Simplicity. Oh no, you had it first out the gate. Yes, Milford. Yeah, yeah. Well th those three are uh have got bigger. I know all of them have got bigger, right? Yes, yes, yeah. They've all got they've all got bigger for different reasons, reasons, right? Yes. Absolutely. Very different reasons. Very, very different reasons. Um Milford, if you were interested to know, had three percent of line share in 2017. They're now got about 11%, which puts them at position four. Wow. Fourth largest provider as of December 2025. What would you put that down to? Returns and marketing. Yeah. Which one more so than the other? Uh marketing their returns. Yeah, there you go. Yeah. I I'd written down some ideas as to why, and then that that's exactly where I was. So you yeah. Um maybe not so much this year though. Maybe not. Well, the funny thing is with investment returns with active fund managers, Tim, is that past performance does not guarantee future returns. We know this. I think they add that in in the advertising, actually. Yeah. See, we always told you. It's more writing. Do you know how many other funds, banks or non-bank ones, had better returns in their aggressive fund than Milford last year? How many different KiwiSaver providers? Banks or non-banks. I couldn't tell you, mate. Would you want to have a stab? No. Thirteen. Okay. So they've moved to the the the third biggest position from marketing and marketing previous returns last year, thirteen. So not just the two that are above them, thirteen other fund managers outperformed them in their aggressive fund. Yeah, but you can't say that it was based on returns, because if that was the case. Yeah, but they'll be they'll be advertising a different period of return, right? Of course. Yeah, but what I'm getting at here is if you said I think they got to number three purely because of their returns, well, that argument goes out the window when you look at the fact that thirteen other providers did better than them uh last year and that hasn't really affected it. But the marketing of particular time periods and returns, absolutely. Yeah, in my experience, it's the number one company that comes up when you're working with a client and they're thinking about making a move somewhere. Mm-hmm. They're saying, Hey, I look, I've been with this KiwiSaver. I've I've I've really been thinking about Milford. My my cousin's friends in it and reckons it's bees, knees and good. So it's not just me. I'm having those conversations too. Oh, absolutely. It's it's the the most common one. I don't usually get someone saying I'm gonna jump over to Westpac. Okay, okay. No offense, West Pack. No, look, yeah, please. We did have disclosure at the start. I don't know why you chose Westpac. Fair enough. Um, well, look, okay, let's keep picking on Milford, okay, because I've prepared a whole lot of stats that um you know sheds a bit of light on this. Uh well, the the changes anyway. So I've looked at where Milford's Kiwi Saver um asset allocation for their growth fund was when they first started. And then I'll tell you what their asset allocation looks like now. So I'm not going down the whole active-passive argument, even though their their equity um portion of their KiwiSaver has always been actively managed. But uh just just the pure asset allocation alone. Uh they'll be pretty cash heavy, wouldn't they? Well, I said it was a growth fund. Yeah. Wouldn't you think that that means the opposite? Well, a growth fund you'd you'd think would be a max of what 30% bonds in cash. Even that's quite big if you ask me. But yeah, that's what I would I I would have said. But uh not the reality in 2010, sorry. 2010 Milford Growth Fund comprised of three different asset allocations. Only three. Fifty percent of it was in New Zealand shares. Yep. 10% of it was in Australian shares. You might have guessed 40% of it was in New Zealand cash. No, I'm not talking about international fixed interest or international bonds or international cash. 40% New Zealand cash in the growth fund. Wow. 2010. That's a long time ago. Yeah. Okay. What is it now? What is it now? Uh as of November 2024, it has got uh at least one, two, three, four, five, six, seven, eight different asset allocations here. But if we want to jump straight ahead to the New Zealand cash, seven percent. 40% moved down to seven percent. How many balls? New Zealand shares, which did have 50%, has now got about eight percent. Australian shares has gone up. They've got 12%. Mm-hmm. At long last, um, international shares has gone up to 48%. They weren't even in the fund when it back in 2020. Didn't even bother with US stocks. No zero US stocks. You know, part of the reason why that would be right is because their fund has grown and they can't just yeah, they they can't just keep investing billions and billions of dollars into the NZ market without without they'll own they'll they'll own 99% of some of the companies in the NZX50. Correct, correct. Yeah, so they've had to uh diversify and start going and buying some uh international shares, so 48%. Uh in fact, if you wanted to know that happened in 2013, they started investing international shares. Um International fixed interest uh at long last was introduced in 2013 as well. Um that's now sitting at about 15% for 15% of growth fund, international fixed interest. Okay. 7% New Zealand cash. Uh, and a very, very small amount. I don't even have a percent here, sorry, but a small amount is sitting in New Zealand listed property. Uh, another small amount sitting in international listed property and a very small amount in New Zealand fixed interest. Okay. So it's about what uh 80-20 now. What have we got here? 15% cash um and uh sorry, 15% international fixed interest and seven percent in New Zealand cash. I mean there's twenty-two already. So growth funds meant to be a stock standard growth on 70-30. So they're closer to where the well, they're much closer to where the the benchmark is compared to what they were in 2010. My growth fund that I'm in has had 90% in shares and never waivered. Maybe it's gone up or down one or two percent due to just market shift, but 90% the whole way. Yeah, that's an aggressive fund though. Mm-hmm. Not a growth fund. Okay. All right. You're probably right to call that out. So I didn't know you were going to be a stickler for rules today. Well, growth fund is is meant to be 70-30. Anything 90 or above is aggressive. Not back in 2010. 2010 we're allowed to get away with uh what did I say, 40% sitting in New Zealand cash? Imagine a Kiwi Saver fund today out there, marketed as a growth fund, with 40% invested in New Zealand cash. And can I just remind you how the New Zealand dollar stacked up against the US dollar recently? Mm-hmm. Not very well. That fund would not have lion share or a gain in lion share up to the third pole position. Well, that's why they put rules in place, my friend. Do you want to take a look at how ASB's changed? Sure. They made some changes, have they? Bigger all. Yeah. Well, why would they? Well, I just thought what a contrast. Here goes a passively managed fund, supposedly passively managed, the equities, uh, the equity investing is is passively managed. Um, yeah, by BlackRock, actually. Right. Um, but well, I'll just tell you the um the original asset allocation of the fund, um, it was 11% New Zealand shares, 13% Australian shares, 46% international shares, uh, 10% property, 5% New Zealand fixed interest, about 11% international fixed interest, 4% cash. Fast forward, you know, that was back in 2008, fast forward to the end of 2024, nothing really changed. A few differences along the way, though. 2021 to 2024, they've introduced about between 1 to 5%. Yeah, it went up and down quite a bit, in uh in other. Do you know what other might have been? Property, gold. Gold, yeah, commodities. Gold, precious metals, yeah, commodities. They gave it a crack. But uranium in there. Yeah. I know you can market yourself or or or um you know can sit be considered a passively managed fund when your all the equities being um traded in there are done so in a passive style. But when your asset allocation can jump around from they've had property in and property out, they've had precious metals come in and precious metals go out. Um in July 2008 to about July 2009. And don't quote me exactly on the exact dates, but uh for about a year period between 2008 and 2009, 0% Australian shares. They cut them out. You know, when it started, it had 13% Australian shares. They cut Australia off for a year and then let the back in a year later. It's pretty, pretty active um kind of decision making there around asset allocation. And um, if you in case you're wondering what gold did in 2021 to 2024, uh was 7.25% annualized. SP 500, 7.59. Okay. Look, what what what I know is uh well, what I can tell you from looking back at the the history of um but in particular Milford's um KiwiSaver funds, their their asset allocation was jumping up and down and all over the show in earlier years. They one year went from having 40% of the entire fund in cash to the next year having 50% of the entire fund sitting in New Zealand cash to two years later having only 20% sitting in New Zealand cash because they were extremely aggressive and in and having cash and then going investing it all when they felt the timing was right. Pretty active decisions. You don't see as much of that uh more recently. I think that's something that's changed over time. Um but when you start considering how KiwiSaver funds have changed over the last 20 well since 2007, and start putting together some thoughts on where you think it's heading, what do you land on? Because I know an argument we had on this podcast a year ago, two years ago. Well, there's been a dramatic shift towards more passive funds, right? Mm-hmm. And a lot of fund managers are going towards passive or they're doing an active part of their portfolio. Like you, you know, half of their portfolio will still be actively managed, but the other half will be passively managed. Doesn't make sense to me that one. But we'll come back to that later if you like. Yeah, well, yeah. It's about trying to get it that that little bit of alpha, right? With the with their little bit left over because they think they can yeah, I don't know. Maybe it's an ego thing. Well, the only the only way to be the top of the market is to take the average that everybody else is getting, but then just a little bit, little, little edge to do better. And that that's the theory, right? Whether or not that that actually happens is I just feel like if you think that you could use that little bit to do a little bit better, then why wouldn't you do with the whole thing? Facts. Facts. Um so obviously more money's flowing into index funds. Um that's that comes with lower fees typically. That that could be observed overseas as well. Two-thirds of US hedge funds are now passively managed. Dramatic shift. Yeah. And your argument is that what happens if everything goes passive? Well, if you look at the momentum. I I agree, but if everything goes passive, then there will become a market inefficiency, and then there will be active fund managers flocking to the market to capture that inefficiency. Yep. Well, we've already spent like two podcasts on this. We won't go we won't go down this remote again. I know, I know. But you you must admit though that um there is the very, very obvious trend that passively stalled investment is increased, increasing. It has increased over the last 20 years with regards to KiwiSaver funds at a consistent pace and it's not gone backwards. Yeah, and I think that will continue to happen, but I don't think it will shift entirely. I think there will I I don't know, I can't tell the future, but I feel like there is going to continue to be a shift towards that, but at some point there's gonna be a shift back. Oh pushback. Well, yes, because there'll be if everyone's passive, then there's there's gotta be opportunity in the market. They will create opportunities if no one is taking opportunities. Right now the market is so efficient that it is stupid too. But if everyone's efficient, then there's gonna something's gonna blow up, right? It can't it just can't happen like that. I think if anything's gonna blow up, it'll be your head if I keep pushing you on this one. Yeah, well it just doesn't make sense to me, man. Because how can how can stocks go up if there's not people buying and selling it? Do you know what? I've never ever ever seen an advertising for Kiwi Saber. Invest with us because we are passive. Well When are we gonna start seeing that? That's a really good question. We have we are starting to see it. Well, we are not really. Kernel does advertising and they're very passive. I know that they're passive and they're doing advertising, but do they use the fact that they have a passive investment strategy? No, they'll talk about low fees, same as simplicity. They talk about low fees, yep, market returns. But they don't say we're passive because that probably doesn't mean anything to the average New Zealander. Not now. I predict as it gains more and more and more momentum and it starts flipping the number of um active management, because at the moment there's more active managers of line share than than passive. When that gets flipped, I think more people will be aware of money managers underperforming the market average. And I think that'll become uh an advertising point. Yeah, so yeah, I'd love to see that. Likewise, I've never seen it before, but I think that is what we can expect to see in the future. You think fees will continue to fall? Yes, I do. Due to sheer scale. You think uh there'd be government intervention there? Yes. The tax generated from KiwiSaver and the uh rate at which it's growing, those politicians won't be able to keep their hands off it for much longer. Maybe not in an election year. Now they have already halved the tax credit or what they call the government contribution, which is a tax credit, and then halved that again. Yeah, well, they've put it back on the employer. Next time the the country's uh running a deficit on a budget, I'm pretty sure there'll be options considered around how to get their hands on some uh some of the extra money sitting in this pot. Sure. Would you be to differ? Oh uh I don't know. Fees have fallen quite a lot already. I think they will fall a little bit more, but I don't think they'll fall drastically. I think Do you think that's consumer driven and and demand driven or competitiveness? I think it'll be consumer driven. I think there'd be an element of regulation as well. I think they won't just fall, it'll it'll be you'll have to justify your fee. Mm-hmm. Oh, you mean an advisor fee or a fund manager fee? No, all. What value are you giving to charge 2.6% when old mate down the road's charging 0.6 and your funds are doing the same thing. That one down the road is giving you the exact same tools, the exact same access to advice, whatever. That's not a free market. He's allowed to charge two point six if people are willing to pay it. Yeah, but it's it's a government regulated scheme. So of course the government are going to get involved. I just think You think that they they'll actually get involved in regulating fees? Well, they already have, right? In in a way. They've all the default providers now, they all have to abide by these standards of proving value for money. Yep. I think that will I think that might cascade into the rest of the landscape. Okay. That's just a prediction. I don't know. Fair enough. And if the regulators don't do it, then consumers will, right? Mm-hmm. Contributions? Like contribution rates? Well, they're rising, obviously. Um we're still abysmal compared to Australia. Australia is 11.5% of wages. That's you're you're putting the employer and the employee contribution together to get to that eleven point five? No, that's the that's the employer. The employer alone is doing 11.5 to Aussie Supers. Yes. What are we at? Uh we're at 3.5 now. Yeah. I knew the answer. I needed to hear that. So New Zealand Kiwi Saver, total market value, 120 billion. Uh-huh. Australian, 3.7 trillion. Uh small difference. Yeah. Now they've got a few more people than they're. Yeah, I'm glad you mentioned that. That's still a much bigger difference. Have you done the per capita on that? No, I haven't, but uh it it is it's it's mind-blowing. It's mind blowing, yeah. And they well, they started earlier and they started aggressively. They don't I don't think they allow for house withdrawals. Yes, they do. Oh, they do? Okay. But uh listeners might hear that and say, well, why don't we just increase our contribution? Well, you've got to look at the uh the the big impact of what that'll have on business. Oh I'm a big fan. Well, if every time this comes up, small business owners kick and scream, but they all of course they're going to. It directly affects them. Just like farmers will kick and scream when a a bill comes in place to affect farmers, just like when there's cuts in Wellington from the government, everyone kicks and scream, right? Because it's directed at you. Australia are doing it. Small business owners just had to deal with that at the start, and then they've just adapted. So I get it, and there is there is always going to be pushback, but I think if like New Zealand super is going to be broken, right? There's there's no way that we can continue to fund New Zealand's super. That's where this conversation is heading. Why does the government have to enforce this? Or what is the incentive for the government besides the tax generated from from KiwiSaver? It's all about the uh soup superannuation. Yeah, we can't afford it. We we cannot. There's no way that we can afford with the same rules we have now around NZ Super in 30, 40 years' time. Something has to give. Something is going to give, which is why this was put in place. Which is why KiwiSaver's in place. Because if they can make people uh solve that problem for themselves by forcing them to save or incentivising them very heavily to save, then it's not going to be the government's problem having a whole lot of old people out on the street homeless. Um KiwiSaver will try and fix it to a degree. Yeah, I think there'll always be some element of social security. Of course. But it'll look a lot different. Means tested. Yeah. Ours is very simple right now. We set up a very simple turn sixty-five, get this. Same amount. Yeah. Whereas if you look at United States social security system, very different. Very different. Yeah, couldn't agree more. So by when? Uh I know this has already been said, but in your opinion, you know, we've got an election year. Have you got some uh some predictions on contribution rates? I would never make a prediction on the future of politics, my friends. Really trying to get a soundbite of you making a prediction and hold on to that soundbite for a while. I refuse to I knew you would. I refuse to make a prediction on anything that I do not know with certainty. You're just boring. Well, imagine if a client came to you and said, Hey, Tim, where's the market going next year? And you gave them an answer. I did that before I came to this podcast. Oh, right. Yeah. I think this might be a really good time to say I hope listeners have enjoyed this episode. I hope I've given some kind of value. As for this week, that's us. And if you want to call the FMA on Tim for their last statement, do it.