The KiwiSaver market is undergoing a notable shift as investors increasingly move their savings away from large banks towards smaller, independent providers. This trend reflects greater confidence in boutique firms, which have demonstrated consistent long-term performance and better member engagement.
Recent data from New Zealand’s Disclose register shows Milford Asset Management leading net inflows, attracting nearly NZ$1.5 billion over the past year. Other boutique providers like Generate, Simplicity, and Kernel have also gained significant market share.
Though major banks such as ANZ, ASB, and Westpac still hold substantial portions of KiwiSaver funds, they have experienced considerable outflows.
ANZ, the largest provider with 17.5% market share, lost nearly $730 million in net transfers last year. This decline follows several years of underperformance; Morningstar ranks ANZ’s conservative and balanced funds among the poorest performers over the last decade.
In response, ANZ emphasises initiatives to improve investor confidence through proactive communication and enhanced digital tools that aim to make KiwiSaver easier to manage.
Morningstar’s data director Greg Bunkall notes the role strong performance and brand visibility play in attracting new members, with Milford and Generate regularly topping fund performance tables. This has encouraged some degree of “performance chasing,” where investors switch providers following positive media coverage or strong returns.
KiwiWrap and Kernel stand out among boutique providers for their swift growth and net inflows.
Murray Harris, Milford’s KiwiSaver head, says the fund’s long-term returns attract investors who recognise the importance of evaluating performance over five to ten years rather than short-term gains.
He also observed that market strength influences switching behaviour, with more transfers occurring during periods of rising markets as members feel more confident making changes.
Dean Anderson, founder of Kernel, highlights that growing public awareness has helped people understand alternatives to traditional bank products. Although switching rates remain relatively low compared to other services, Anderson expects them to increase as KiwiSaver balances grow and investors seek better fees, service, and values alignment.
The growing prominence of smaller providers displays trust in their stability and ability to deliver competitive returns, challenging the dominance previously held by large banks.