KiwiSaver pitched above the average financial literacy of level of everyday New Zealanders; Workbase offers five-step check-list for providers and members

KiwiSaver pitched above the average financial literacy of level of everyday New Zealanders; Workbase offers five-step check-list for providers and members

By Amanda Morrall

Most people in KiwiSaver don't understand the scheme they're in and require basic investment education beyond what they're being offered by their providers,  a non-profit financial literacy group says.

Katherine Percy, chief executive of Workbase, said KiwiSaver providers, particularly those heading default funds, had a "moral obligation" to do a better job of educating the masses, close to 1.8 million now. (See interactive chart below and latest KiwiSaver statistics here).

"We believe there are far too many assumptions being made that most people understand the basics and there is some clear evidence that easily half of New Zealanders don't,'' Percy told

Percy said the claim was not frivolous and was backed by several financial literacy surveys rating New Zealander's knowledge of investment fundamentals such as risk and diversification.

"The levels of literacy, language and numeracy can tell us that when people are confronted with unfamiliar content, technical terminology, multi-layered information, all of which is true for KiwiSaver, they're not likely to be able to fully engage in it. And other research suports that; that most people in KiwiSaver don't understand the KiwiSaver scheme they're in.''

While Percy said while financial literacy levels varied among KiwiSaver members and providers, those parked in default funds, were most likely those with low knowledge.

"It's a reasonable assumption that people in default funds have lower levels of interest, knowledge and active engagement around it and for that reason we believe they (providers) have a moral obligation to do more to build their members knowledge and skills which means providing more basic information."

Rather than flood KiwiSavers with more documentation and information, Percy said they needed to be more discerning, selective and creative in terms of how they went about it.

"I'm not suggesting any of them aren't putting information out there but when we review it across the board it makes alot of assumptions about peoples' knowledge of terminology and financial concepts. For example, expressions like conservative, moderate, aggressive or growth funds; they don't have that much meaning for people who aren't familiar. Some websites talk a lot about asset classes, which I would suggest for unsophisticated investors has very little meaning."

Workbase offers the following five suggestions to help their members become more informed:

1) Rather than simply providing more information, KiwiSaver providers should convey more basic information that builds people’s understanding about the schemes, types of funds, risks and fees.  

"I think it's starting where the audience is likely to be and with more basic information and making it easier to move through the layers to understand what is the simple surface level and then to build on that knowledge and not to expect people to understand that right away but to progressively build knowledge over time,'' explained Percy.

2) Expect customers to build their knowledge progressively in a range of ways -  not just through written information.  Short videos and talking to frontline staff may be an easier place to start.

"I guess we believe just providing information through websites and in written form is probably not that helpful for this sort of complex information certainly as a starting point,'' said Percy.

3) Questions like do you understand, only invite the answer yes. And yet there are ways that you can ask the person tell me what you know about this so I can ensure the information I'm giving you is what you are interested in.

Percy said staff training would be the most obvious way to improve communications and assessment of members understanding.

"Under the new Financial Markets Authority, there is an assumption that people on the front line giving advice to customers have the skills to give accurate and consistent information."

4)   Do not assume that people know and understand commonly used financial concepts and terminology.  Websites, prospectuses, and other investment material should aim to build people’s knowledge and understanding.  For example: include definitions for financial terms and concepts where they are being used, rather than in a glossary.  This can be done in several ways, such as by featuring a pop up when a reader hovers the cursor over a term.

"Also, I think we'd like to see a bit more thought about keeping relevant information together so fees information is adjacent to scheme type where it differs by scheme. Often there may be a big table about fees somewhere and a big explanation about the schemes somewhere else but it's hard to put those two things together or it poses another barrier when you have to search for that information."

5) Ensure written communication is designed in a way that helps customers to easily understand information provided and find the information they need.

"We can easily see providers are putting a lot of money into communications and they are, by and large, well written but there are some very simple things, like not capitalising entire sentences because it makes them harder to read; having clearer lay-outs; explaining how people can navigate the document at the beginning, or having a short simple version at the front, and more for those who want it later on. There are lots of ways if you were focused on building knowledge you might not write it in the way you would for a very informed audience.

"I think for default providers, we have to assume that a high portion of their customers do need some explicit support to build their knowledge about KiwiSaver. It's not an everyday service and investment is not an everyday thing for many New Zealanders. We're still at the early stage of building peoples knowledge."

Steps New Zealanders can take to make informed KiwiSaver decisions

  • Think about the skills and time you put into finding the best deal when shopping for groceries, clothes or a car and how great it feels to purchase something at a good price.  Spending time learning about KiwiSaver and other investments will help to improve the amount of money gained from your investment/s.
  • Accept that learning about KiwiSaver and investing will take time. Be prepared to keep going back to learn a bit more each time.
  • Take steps to improve your own knowledge and understanding by reading financial advice columns in the newspaper, and visiting independent web sites such as,, and the Money section in
  • Ask lots of questions – and keep asking until you are happy that you are getting answers you understand.
  • Don’t be afraid to ask ‘silly’ questions; there are no silly questions when it comes to your money.
  • Remember you are not alone – and don’t feel embarrassed!  Many people have trouble understanding financial information.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.


This reminds me of the Australian first home owners grant.

The government tries it's hand at social engineering by making it wildly attractive to buy a new home at the bottom of the market if it's your first home.

Like a four year old, they take the treat on offer.  The sudden influsion of new buyers drives up house prices, which promptly slip back when the offer expires leaving the highest risk home owner group with low, no or negative equity.

People who have no investment understanding have no place investing.

Is joining Kiwisaver a good idea?

I was thinking about joining Kiwisaver. I'm 17, about to turn 18 and I'm looking for a part time job. After reading some of the comments on this site I'm not so sure.

Any advice?

Hi there,

The comments on our site with respect to KiwiSaver present it in a negative light but they are a vocal minority. I'm not a financial advisor but the fact that you are thinking at 17 about your retirement savings puts you leagues above your peers. The advantage of KiwiSaver is you get $1000 for free and $521 a year from gov't (max) in "member tax credits." Also your employer will chip in 2% of your gross pay. That will change to 3% if National gets re-elected. Many would argue you won't find a better deal than that. 

Explore your options, keep researching, make an appointment with an authorised financial adviser that works for a KiwiSaver provider and ask away...then make a decision for your yourself.


Amanda: Have to disagree with your recommendation to "make an appointment with an authorised financial adviser that works for a KiwiSaver provider and ask away".

Your recommendation should read "make an appointment with an "INDEPENDENT" authorised financial adviser that "DOESN'T" work for a KiwiSaver provider and ask away. Then seek a second opinion from another independent. Then make your assessment.

You may wish to wait for a while and then read some of the inevitable counter-points to Amanda 'Ra-Ra-KiwiSaver!!!' Morrall's opinions... :-D

Chuckle. Have a care Bernardo doesn't come a breathing fire after you Malarkey.....

Gareth and the boys must wonder why BH seldom leaps to THEIR defense...


Amanda is simply reporting what Workbase is saying. It's clearly labeled KiwiSaver news.

It's useful information and (we hope) helps explains some stuff to 1.8 million people that are already in the scheme.

You may not agree with the comments from Workbase, but that's no excuse for jumping in and attacking the messenger.

I've already commented on your comment over on Friday's Take 5.

It's just no fun when you jump in here with the snark.

Again, think about this forum as a place where we have a rowdy discussion, have some fun, learn some stuff and consider others opinions.

Imagine when writing that you're saying this to someone sitting next to you who has bought you a beer.

Again. Last time. Next time is red card.



No dont join, if you have any debt pay that off first....from then on avoid debt, sont get a Cedit card they are spawns of the devil, get a debt card.

If you can, save to deposit accounts for now, pick a NZ bank like TSB or Kiwi....I think we are about to go into a depression as bad as or worse then the Great Depression....12months from now things might be might be a bit better then....but I think it will be a lot worse.....kiwisaver accounts are based on shares and property assets by and large, all will drop 50%+.

If you really want a kiwisaver account pick the most conservative/safe one you can find you can swap easily one with Govn bonds and deposits, avoid commercial property and the NZ share market.....

I would suggest you look for a good trade to learn.....carpenter, plumber....a practical skill that will keep you fed.  Main thing pick something you love to commit to it....

NB I took out a life insurance/pension policy at 17 (the kiwisaver of its day)....its run for over 30 years, it lost 22% in 2008....8 years of savings vanished.....right now I'd sit and wait....

Asking opions is good, but as always make your own adult choices and live with them.  One of the biggest things for making your own decisions is do your own research, dont take on political blinkers and try and learn to look medium and long term.....all these are hard to do.


Ignore all that crap swifty...those old buggers will plan your life to the grave...the only bit they got right was to tell you to give Kiwisaver the heave ho.

Look at what you are capable of learning to do that will be fun and bring you just reward in your lifetime. That's all you have!

Bugger off to aus and put some time into heavy truck driving AND SAVE to pay for a bloody big Toyota truck and all the gear to allow you and a bit of crumpet to go bush on an endless gold hunt with the best of the best clobber. Have a truck each. Double up on everything.

By the time you leave the urban shite behind you, you will need skills in diesel mechanics, basic medical stuff, electronics for beginners and geology...oh and how to survive in the aussie outback on bugger all.

If you do the job properly, you will find the yellow metal and have a ball doing it until you are a really old fart.

Agree, independent preferable. Only problem with that is you have to pay, well maybe not for first visit. I advocate education, not the product. Sure, see four kiwisaver product providers if you can, to get as much free advice as possible. As for me being a cheerleader for kiwisaver, I reject the charge. I am pro savings, those who critise here don't offer any meaningful or realistic alternatives. And apparently they are independently wealthy as well as being clairvoyant given their comments.

Are these 'financial advisers' the same ones who recommended people to invest their entire life savings into finance companies??

Its highly unlikely I would pay for financial advice . I'm looking to grow my savings, not shrink them by paying for advice or losing half my savings to a stock market crash or something related to shonky advice.

Besides, why would I pay when I can get free advice here on interest, by the boatload. Everyone here seems to know what their talking about.

In tems of debt, I have none. I'm only 17. And I'm pretty sure most 17 year olds don't have any either.

Managed to land a temp job working as a vote counter at the election in November. Other than that its not looking too good. Too many people chasing too few jobs.


Great name by the way. My daughters are big Pokemon fans. Pikachu a right bundle of energy.

Most if not all of those financial advisers who put people into finance companies are now gone.

The ones remaining now have to get qualifications from the Financial Markets Authority and are registered.

Best way to find out for sure is to ask any adviser.

That's fantastic you are debt free. Do everything you can to stay that way. The only sustainable reason to borrow is either to invest in some sort of income producing asset or skill where the income produced will be much, much more than any interest costs, with a good chunk left over for repayment of capital.

I think borrowing to buy consumer goods or any other assets that has a life of less than a couple of years is dangerous and expensive.

It pains me whenever I see these ads in the paper for 40 months interest free to buy televisions and furniture.



Besides, why would I pay when I can get free advice here on interest, by the boatload. Everyone here seems to know what their talking about. 

Free advice is worth every penny you pay for it. 



Amanda and Bernard: RE: The ones remaining now have to get qualifications from the Financial Markets Authority and are registered. 

According to the regulations, any one who is employed by a "QFE" and assuming KiwiSaver Providers are "QFE's", then none of their employees are registered (or qualified). They are commission salespeople. If you seek their advice, what advice do you think they are going give.

Could you please confirm


You raise a good point re QFEs, and the danger of bias. As per your earlier comment on this thread, I did agree that seeking independent advice is both a good idea and preferrable. Problem is, as I said before, you usually have to pay. 

For someone who is not likely to pay for advice but can be bothered to make phone calls with a list of prepared questions or even better pay a personal visit, a cheap alternative would be to meet with a couple of different AFAs from different providers. My understanding is that some (perhaps not all) do have AFAs on board. The key would be asking...agree a QFE will be less objective as they are pushing product.

You don't have to buy what they're selling, just take the information, digest it, compare it to what others have to say.

For the benefit of the 17-year-old who raised this issue, here's a link to the FMA's website explaining the differences between a QFE, AFA and RA.

Here's a link to the Institute of Financial Advisers

And also a link to an article on how to choose an adviser.

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