Can the right advice lead to saving more, sooner?

When you have a big goal in mind, good advice about money could be the best step you can take toward success.

You might want to buy a first home, enjoy retirement, start a business or travel. You might be saving through your KiwiSaver account, a managed investment fund or shares, or you may even have some of your investments in property. Regardless, the right advice can lead to better results, sooner.

It’s not just our opinion. New Zealand research shows that people who get the right advice and guidance usually grow their money more than those who don’t. 

A study from December 2020 showed that New Zealanders that sought professional financial advice have 50% more in their KiwiSaver account, save 3.7% more of their earnings, and on average, receive 4% higher returns on their investments. (i)

Perhaps the most telling discoveries were the barriers to seeking financial advice. It turns out lots of New Zealanders have three main concerns:

• They think advice will be expensive, and the cost could be more than their returns.
• They’re not sure who to trust, and whether the advice will be unbiased and not affected by things like commissions.
  
• They think it’s only useful to people who already have a lot of wealth.
  

Most New Zealanders will hold their KiwiSaver account longer than any other investment, and it will probably be their biggest investment, with the possible exception of property.

So, it makes sense to get good advice early – especially since the decisions you make now (such as your fund choice and contribution rate) can have huge impacts on your balance over the long term.

We’ve seen the impact good advice can have.

We analysed the savings performance of ASB KiwiSaver Scheme members who had a fund choice conversation with us, compared to those who joined as default members and didn’t make a fund choice.

There is a lot to be gained from engaging with your KiwiSaver account. For example, our calculator shows that a 41-year-old could have $50,000 more at retirement by investing a little extra each week into the right fund. An extra $14 per week now into the Growth Fund, could mean $45 extra per week during retirement. (ii)

We’ve created a tool that can help you understand your savings goals and give you information to help you reach those goals sooner. One of our team members will take you through a series of questions about your KiwiSaver account and show you how you could maximise your savings towards your first home or retirement.

Here’s what some customers have told us about it:

• “Your KiwiSaver conversation tool really helped me get a better understanding of my retirement savings and what it looks like in the long run. I feel more confident now about having banking conversations in general.”
• “I had my KiwiSaver savings with a different provider, and they didn’t explain things in much detail. Now I’ve gone through your KiwiSaver conversation tool I know a lot more about my KiwiSaver account. It’s a really good tool, and I’m recommending it to my friends and family!”

We also have a host of digital tools and places you can go to find out more on your KiwiSaver account:

• ASB KiwiSaver Scheme calculator
• Help me choose a fund
  
• ASB KiwiSaver Investor Hub
  

At ASB, we understand that everyone is different and talking about money can be tricky - it’s important to find trust-worthy advice that is easy to understand.

One of the easiest options available to you is our own team of KiwiSaver Specialists - they can take you through a series of questions regarding your KiwiSaver savings, your goals and what you could be doing to maximise your KiwiSaver savings towards your first home or retirement. This is an important part of getting the most out of your investment, as being in the right fund, along with your contribution amount can have a significant impact on your long-term savings. This is a free service, regardless of your KiwiSaver account balance - they don’t work for commissions. This means they’ll give you information that works best for your goals and timeframe, because they aren’t influenced to push you toward a product that gives them a higher commission instead.

The easiest way to talk to one of our team is over the phone, on 0800 272 738. They’re available from 8am to 8pm during the week, or 8:30am to 5pm on Saturdays. They’re happy to talk through any questions on your ASB KiwiSaver Scheme account, and what you can do to meet your savings goals sooner.

If you’d like to meet in person, you can simply pop in to your local ASB branch. Remember to check our current Covid restrictions (iii), to ensure your branch is open at the moment.

Remember, financial advice isn’t only for people who already have wealth. It’s just as important – probably more important, in fact, when you’re trying to grow your money. Our team are happy to help you move forward, and help you make decisions to reach your goals faster.

As we say, we’re all about getting you one step ahead. That’s exactly where our team can be the most useful.

Listen to the latest Investment Podcast episode and get more investment insights at your fingertips through our ASB KiwiSaver Scheme Investment Hub.

To see all our blogs, go to Your Money (asb.co.nz)

Interests in the ASB KiwiSaver Scheme (Scheme) are issued by ASB Group Investments Limited, a wholly owned subsidiary of ASB Bank Limited (ASB). ASB provides Scheme administration and distribution services. No person guarantees interests in the Scheme. Interests in the Scheme are not deposits or other liabilities of ASB. They are subject to investment risk, including possible loss of income and principal invested. Fees may change. For more information see the ASB KiwiSaver Scheme Product Disclosure Statement available from www.asb.co.nz and the register of offers of financial products at www.disclose-register.companiesoffice.govt.nz (search for ASB KiwiSaver Scheme). Returns are a reflection of past performance and are not a guarantee or indication of future performance because returns fluctuate (move up and down). Returns can be negative and you may receive back less than the total amount of your contributions.

i Money and You – Financial Services Council, December 2020

ii Calculation: We assumed a starting balance of $30,000, a $70,000k salary, with 3% employee and employer contribution into the Conservative Fund, beginning to access funds at age 65 through to 90. It assumes the employee contribution increases to 4% and their fund is changed to the Growth Fund. The ASB KiwiSaver calculator and further assumptions can be found here.

iii https://www.asb.co.nz/contact-us/branch-changes.html