In one of last week’s articles I mentioned ‘unlocked KiwiSaver’ products. It would be remiss of me to not explain what these are. For people outside of New Zealand, KiwiSaver is similar to Australia’s Superannuation or perhaps the 401K in the US. For KiwiSaver, members are not allowed to make a withdrawal on these funds until they are 65. There are exceptions of note here: first home buyers, and those under “extreme hardship” (with various conditions attached).

However, the idea of investing in a managed fund that is easily accessible and available to the public should be appealing to people who want to spread their eggs into different baskets. Remember that diversification is good basic risk management tool for long term investing.


  • Two examples
  • Is it for you?
  • Get advice

Two examples

Unlocked KiwiSaver products may use exactly the same funds as KiwiSaver, such as WealthBuilder from NZ Funds. In this case, your money in WealthBuilder is invested in exactly the same way as the NZ Funds KiwiSaver, but is not locked away from you until retirement. Another variation is from Booster. Their Private Land and Property Fund gives you access to a managed fund listed on the NZX, again with similar flexibility. Both are accessible on their apps and client portals, making it easy for clients to track their progress. They are nice, simple, low-cost entries into markets and investments that may otherwise seem intimidating to many people.

If you read last week’s article you know I refer to the Retirement Commission’s term of the three-legged stool for retirement, using KiwiSaver, NZ Super and your “own Assets”. Without getting into the debate about whether NZ Super will be around in 20-30 years, creating our own asset base is just prudent risk & retirement management. Perhaps, the ‘unlocked’ KiwiSaver (or other similar funds) could form part of your asset base, ready for retirement. For others, this type of fund may provide a better (potential) return than the banks are currently offering on their term deposit saving accounts.

Is it for you?

The only challenge I have with these products is that it is still relatively easy to make a withdrawal. One of the reasons that KiwiSaver (or Australia’s Superannuation) are successful, is because they cannot be touched. Human behaviour seems to go like this. Person sees a lump of money growing year after year in a Bull market run and thinks to self “my that new car/boat/spa pool/cruise holiday…[insert fancy dream] looks great, we have the money, let’s just do it. And poof…! Investment/savings: gone.

You still need some discipline and personal management with your investing behaviour.

However, if things get really tough, if you’ve used all your personal insurance vehicles to manage your risks, yet still you have hardship, you have access to your funds without needing to prove it. Under the KiwiSaver scheme, the requirements for proving hardship are quite tough.

Get advice

There are different classes of advice that can be given in New Zealand. This is being simplified (I use that term loosely) as the FMA goes through their final regulatory changes. These are so the public can have greater clarity and trust around the advice they receive. Currently, Qualified Employees can talk only about their own company’s products. Class advice uses examples of people in a similar situation to yours. Personalised advise for investments is from an Authorised Financial Adviser only. Each serves a different purpose within the market. From March 15th 2021, these definitions will change. All will be required to meet similar requirements in training and competency, and all will be referred to as Financial Advisers.

We know from recent research that “New Zealanders are poor at using financial services to help manage their finances.” Sorry to use this analogy, but I don’t know how to fix my car, so I don’t fix it myself. I use a registered and qualified professional to help me. Getting help with your financial and risk decisions should be the same.


It is ok to ask for advice. Not all advice costs. However, not seeking advice from qualified and registered professionals can end up being extremely costly indeed.

[Bolster Risk Management have agency agreements with NZ Funds and Booster. For more information please request a copy of our disclosure statement and privacy documents]
Dominic Bish

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