Hi all.
Been thinking of moving my kiwisaver from WestPac to another provider. Have found out so far that Milford has got good returns and match my needs.
Thing I can't work out is should I go to Milford directly or should I go via an adviser. As far as I know adviser don't charge anything rather they get commission from fund provider.
What are your thoughts. Any positives or negatives of going via adviser or not? If yes, any recommendations of a good one?
Thanks
Thanks.
Personally, I would never recommend a financial advisor that was paid by kick-backs from providers, since it is a conflict of interest for them to potentially get differing payments depending on what product(s) they put you into.
Essentially, think of that type of adviser as a tradie - they are in it to make as much as they can for themselves (which I have no problem with in general).
If you use a fee-based adviser, they will return all the kick-backs / bribes from the product providers to you, and charge you a fee (discussed, advised, and agreed up front before you do anything). That is a 'professional' adviser who will (usually) do whatever is right by their client, regardless of whether it is in their best interest or not.
There will always be exceptions both ways, but in thirty years I have never personally worked with a professional who would not always put their client's interests ahead of their own.
I do suspect that, if you go looking for the cheapest though, you will likely find a greater correlation with a 'tradie' approach than a professional approach - I might be wrong, but I suspect that would be the case.
On a vaguely related note: That is why the medical 'profession' is so unethical. Medical doctors get bribes from pharmaceutical companies all the time. When was the last time your doctor even disclosed that to you when prescribing something ….
In the nz context. There is much less incentive for pharmaceutical company to "bribe" doctors because of pharmac. The way the contract works with sole supplier or cap fees etc sometimes the big pharma may like the doctors to prescribe their drug appropriately only. For the public sector there is a limit around $50 to be declared.
True, but I still feel it is still unethical.
I agree with the fee-based approach for investments (managed funds/investment portfolios etc.), but this is largely irrelevant for KiwiSaver as advice fees are typically built into the management fees of most KiwiSaver providers, and the providers essentially are saying they are providing their clients advice. If an external adviser is nominated, then the fees stay the same, its just the provider passes on the advice fee to the adviser (typically 0.25% for most providers - but ranges anywhere from 0.20% to 0.50%).
Milford often has the best return over long term given risk for the active growth fund from morning star charts. Do read through their various reports in how they go about investing and the type of investments. So give you an idea whether future returns and risks can be maintained. Do note the fees are higher but not the highest and the best performance is less of fees.
While past performance is not always indicative of future ones the consistency of performance over 15 years can be helpful and also noting the less of dip during downturn, albeit not completely resistent to downturn
The advisor is unlikely to give you any sophisticated advice other generic ones you can find from a generic website but do note potential conflict of interest.
I've been with milford since day 1.
good on you, you are a winner.. (day 1 from the company started or day 1 from kiwisaver started, either case it's pretty good. What makes you joined them? related to the founder? day 1 means there is not past track record of performance though. how do you know they were good at the time.
Day 1 from I joined the kiwisaver scheme 10 years ago. I recalled I did some research online before making the decision. They already had a good reputation for their active growth plan at that time.
I'm with Milford. No complaints, just pick the fund type that suits you personally. Historically their returns have been the best or certainly up there in the fund types I'm in, and this is after all fees have been deducted. App is good. You can also split your KiwiSaver between fund types (eg active and growth) but I think you can only add into a single fund directly from your income. If you wanted to contribute more than 3% then you can also have investment funds with them separately that are also viewable on the app.
Re adviser I wouldn't bother, you can review historical results (which are no guarantee of the future I know) and use something like Sorted to chose the fund type that suits you best.
Yeah getting an advisor for kiwisaver seems overkill to me. Mind you I do like to at least keep an eye on things investing/business. If you are a complete novice you could consider it I guess. To be a registered kiwisaver provider there are many hoops to jump through so they are all hopefully pretty safe and secure. There are some trusted websites out there that rank and rate kiwisaver funds and providers. I will link a few.
https://www.canstar.co.nz/kiwisaver/new-zealands-top-10-kiwi…
I've been thinking about switching to Milford for a while now, finally did it today after reading all the replies, took less than 5 minutes.
That's great. Atleast this post motivated you.
Im with Simplicity as that appeared to be the go to for low fees a few years ago, which over time matters apparently. Some talk I’ve seen says Kernel is a good bet now, especially if you don’t want to be limited by Simplicities ethical strategy
On having a financial adviser for your Milford KiwiSaver, depending on how much the specific adviser charges (range of 0.2% - 0.5% of Funds p.a.) and what your PIR rate is, you could be slightly better off financially with an adviser. Milford take a management fee which ranges between (0.95% for Conservative Funds and 1.15% for Aggressive Funds) and if you have an external adviser provide the ongoing servicing, Milford will rebate 0.20% of their management fee back to the client, and the agreed adviser fee is then passed onto the adviser.
We charge 0.20% because we don't want the client to be any worse off than being a direct client, and in fact, the 0.20% advice fee becomes tax deductible so the client is slightly better off with an external adviser. For a client that has $100,000 with a PIR rate of 28% they are $56 better off due to the tax deductibility of the advice fee. Now, I admit that is not overly material, but its as if someone is giving you $56 each year to have free advice with your KiwiSaver. A win win for both the adviser and advised client I would think.
The value of advice is hard to determine, and for some people they prefer to do it themselves which is absolutely fine, and others are aware that having someone to help them not make wealth destroying decisions is beneficial.
Most people on here seem to know a thing or two about investing, however, its when markets are going poorly and having someone to lean on that is emotionally removed from the money at play is where the real value add comes in.
Kiwiadvice.. I am not sure if your comment about being financially better off with an advisor is correct. I should also point out the management fee charged by Milford was also tax deductible.. (i.e. regardless of who is actually receiving the 0.2% proportion of the fee, in either case this is tax deducible. Please clarify..
Thanks for pointing that out to me gooddeals. That's what I had been told by various other advisers and also from people within Milford. However, having a closer look, it appears the base management fee (as it should be) is tax deductible as you say. And that now seems quite obvious. I was incorrect in that statement and I apologise. I will now edit my previous comment. Edit: can't edit previous comment.
Brian Gaynor, the founder of Milford, passed away a year ago… so unsure if the good returns will last… keep an eye on it. new boss in town might or might not be as good as him.
For those discussing performance, the easiest way to compare all KiwiSaver providers' past performance is via the Morningstar report which comes out quarterly.
The June issue is here: https://cdn.morningstar.com.au/mca/s/documents/KiwiSaverSurv…
You can do either. It should not cost you anything to go to a Kiwisaver advisor.
There was a Financial advisor kiwisadvice on here recently who seemed pretty reasonable in their advice on this site.
Milford has had some really strong returns but remember that's in the past so doesn't necessarily mean it will perform the best going forward. Also, you need to factor in the fees a fund may charge as well.
I would at least ask their advice. They are required to disclose any commissions or incentives they may earn from recommending a particular provider or fund upfront.