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Simplicity cuts membership fees to $0 for all products

Fuseworks Media
Fuseworks Media

Simplicity, the nonprofit KiwiSaver provider, announced today that all members will no longer pay membership fees. The change applies immediately to all Simplicity funds.

Previously, adult members paid a $20 a year membership fee.

In the last five years, the nonprofit has reduced its membership fee four times, including this recent move to $0 for all products.

In contrast, the latest Morningstar KiwiSaver survey shows a median annual membership fee of $23 for growth and balanced funds, and $9 for Conservative funds.

Simplicity’s management fee remains, i.e: 0.31% p.a. for all Growth, Balanced and Conservative KiwiSaver and Investment Funds, and 0.10% p.a. for NZ Share and Bond Funds.

The latest Morningstar survey shows mean management fee charges of 1.18% for KiwiSaver growth funds, 1.03% for balanced funds, and 0.68% for Conservative funds ie. 200% to 400% higher than those charged by Simplicity for equivalent funds.

Managing Director Sam Stubbs was scathing in his criticism of industry fees, which remain far too high.

‘KiwiSaver fees alone in 2020 were $650 million, a massive number given there are no capital requirements, or any need for additional bank branches.

Average management fees for KiwiSaver funds are 2-4x higher than a not-for-profit provider like Simplicity. It’s party time for banks and fund managers, but a rip off for hard working New Zealanders’ he said.

2021 has been a banner year for Simplicity, with fast growth, becoming a default KiwiSaver provider and winning key customer satisfaction awards. The nonprofit also recently launched Simplicity Living, a major build to rent housing programme.

Simplicity has over $4 billion of funds under management and over 76,000 members in its KiwiSaver and Investment Funds. The nonprofit was recently awarded Consumer NZ’s KiwiSaver ‘People’s Choice’ award for the second year in a row, and Canstar’s ‘Most Satisfied KiwiSaver Customers’ award for the third year in a row. It is also Morningstar’s ‘Fund Manager of the Year - KiwiSaver’ for 2021.

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