Simple way to select scheme

By ROB STOCK - Sunday Star Times | Monday, 01 September 2008

 A profit from KiwiSaver is no easy task for financial advisers, but going online is the route one has taken to attempt it.

Commissions for advisers are so low for recommending a KiwiSaver scheme that few advisers have seen it as a way of increasing their revenues, let alone setting up a business just to advise the public on which provider to sign with.

But Conor Sligo says the internet provides a potential solution to that, and believes KiwiSelect, which he has co-founded, might just do it.

KiwiSelect allows users to compare and contrast the schemes and funds of six KiwiSaver providers - AMP, Asteron, Axa, ASB, ING and Tower - but Sligo says over time that number will expand, and even include schemes which pay no commission.

KiwiSelect's revenue comes from commission - around $50 upfront for each scheme sold and then 0.2-0.3% of assets under management each year after that.

But Sligo believes that even if some of the applications made by users are to schemes that do not offer commission, the income earned off the ones that do should mean the business pays its way.

Because it earns money through commissions, the public won't pay anything directly for the service.

It's not just new KiwiSavers who he hopes will figure among KiwiSelect's customers. It also allows people already in funds to switch to another provider.

The aim, Sligo says, is to have 30,000 customers within five years, and he believes it is possible as there are precious few ways people can easily compare KiwiSaver schemes.

That's left many with schemes offered by their bank, or having been shunted into an inappropriate default scheme, and around half of people have no idea how to switch to another scheme, or even, in many cases, that they can, Sligo says.

"Until now, too many people have been defaulted into a provider, and then if they want to know more or change they have to go around the different banks and providers and compare options themselves."

KiwiSelect is an outgrowth of Inform.co.nz, a website where the public can buy insurance - health, life, income, and trauma.

It's not the first online venture promising to provide help for those looking for a KiwiSaver fund.

There's the Consumers' Institute's free Consumersaver.co.nz website, which has the basic details of each scheme and provides a decent enough starting place for anyone's research, but it does not allow for people to sign up. There's the fees calculator at www.sorted.org.nz, and some helpful tips, although again, the site does not allow people to sign up.

As for rivals to KiwiSelect, there are a few. First there are the online sites for most providers, although they provide no comparisons with other schemes. Then there are a few commercial sites such as Getkiwisaver. co.nz, by Advice Financial, that allows investors to sign up to one of the six default providers. Maestro.co.nz offers the choice of the Asteron, Tower and Fidelity Life.