![\"simplicity-kiwisaver-800x463\"](\"https:\/\/nestegginvestments.co.nz\/wp-content\/uploads\/2016\/11\/simplicity-kiwisaver-800x463-300x174.jpg\")
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This week I had the opportunity to sit down with Sam Stubbs, Managing Director of Simplicity NZ Ltd, who 10 weeks ago launched the Simplicity KiwiSaver Scheme.\u00a0 Simplicity has generated quite some attention in its short 10 week life \u2013 and for good reason.\u00a0 This is a KiwiSaver scheme that I believe will shake up the industry for the better.\u00a0 Why?\u00a0 Because Simplicity charge fees that are significantly<\/em> lower than all<\/em> other KiwiSaver providers.<\/p>\n Simplicity point out that KiwiSaver fees \u2013 typically fixed admin charges plus percentage-of-fund management fees \u2013 are often well disguised by existing KiwiSaver providers, who\u00a0usually report on the admin charges as a $ figure, but (conveniently) report the more significant management fees as a percentage.<\/p>\n Proposed new KiwiSaver reporting rules will require all KiwiSaver fees to be reported as a $ amount from next year.\u00a0 However, the NZ Bankers Association is pushing back on this, pleading the high system complexity for banks to change the way they report fees (really?).\u00a0 Surprise, surprise, banks are the biggest KiwiSaver players with over 80% market share.<\/p>\n Simplicity keep their fees low by investing internationally via low-cost passive funds (they use Vanguard ETFs), and with direct investments in NZ due to the lack of low-cost index funds.\u00a0 They are online only, have low staffing overheads, and avoid advertising and commissions.\u00a0 Furthermore, they are structured as a not-for-profit KiwiSaver plan and will donate 15% of annual management fees to charity.<\/p>\n The very credible example that Simplicity use shows that an average-wage KiwiSaver investor contributing 3% for 45 years will be $65k or 20% better off in a the Simplicity Growth fund v an industry average growth fund, based on the fee savings (and growth on those savings).\u00a0 There are of course a number of assumptions behind this, but it\u2019s hard to argue with this sort of advantage built upon lower fees.<\/p>\n I like Simplicity.\u00a0 I like the low fees.\u00a0 I like the transparency.\u00a0 I look forward to seeing how they shake up the all-too-comfortable KiwiSaver industry.<\/p>\n <\/p>\n Dean Edwards<\/p>\n (Nest Egg Investments is 100% independent and does not receive commissions or payments from product providers)<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" This week I had the opportunity to sit down with Sam Stubbs, Managing Director of Simplicity NZ Ltd, who 10 weeks ago launched the Simplicity KiwiSaver Scheme.\u00a0 Simplicity has generated quite some attention in its short 10 week life \u2013… <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-190","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"aioseo_notices":[],"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/posts\/190","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/comments?post=190"}],"version-history":[{"count":3,"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/posts\/190\/revisions"}],"predecessor-version":[{"id":194,"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/posts\/190\/revisions\/194"}],"wp:attachment":[{"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/media?parent=190"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/categories?post=190"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/tags?post=190"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}