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Investor News Wrap: November 2021

Page last updated: 01 December 2021

News from the month that Kiwi investors should know, including new financial regulations, fraud and scams, research, reports and offshore developments.

Couples need $800K for comfy city retirement

Couples should have $809,000 between them if they want to retire in one of our big cities and enjoy a "comfortable" life, according to Massey University’s latest NZ Retirement Expenditure Guidelines.

For a single person the bar is even higher, at $600,000 required (on top of NZ Super) for a retirement budget that gives them "choices” including “some luxuries or treats".

Retiring outside Auckland, Wellington or Christchurch is a cheaper option for couples, with $511,000 required; but for singles a life in the provinces is actually costlier, with $688,000 required.

Massey’s guidelines assume a life expectancy of 90, and the “Choices guidelines” are based on the average expenditure of households in the upper middle income bracket. 

NZ investor loses $700K to scam 

An Auckland man has lost more than $700,000 to a sophisticated investment scam that lasted almost a year and included multiple staff, fake websites and high pressure sales tactics.

The man’s adult daughter reported the scam to the FMA after spotting a number of red flags, including cold-calling, secretive offers in “pre-IPO” shares, and bank accounts around the world 

The man said the scamming entity – which called itself Synergy Capital Asset Management – had constantly called him, confused him with investing jargon, and provided fake online statements. 

“They promised all along you’ll get your money back if you need it for anything,” he said. “It wasn’t until I went to withdraw some money [they] told me that I couldn’t."

“I contacted the FMA for help and support,” his daughter said, “knowing that if the same message came from a financial authority he would be more likely to listen.” 

Moving day for KiwiSaver default funds

The retirement savings of around 263,000 KiwiSaver members, worth an estimated $2.9 billion, is set to be transferred to new KiwiSaver providers.

From 1 December, all KiwiSaver default members who have not made an “active choice” of fund will be moved to new funds with lower fees and potentially higher returns due to a higher risk profile.

The change affects members currently with one of the five providers not re-appointed in May by the Government: AMP, ANZ, ASB, Fisher Funds and Mercer. Members will be transferred to one of six providers: BNZ, Booster, BT Funds Management (Westpac), Kiwi Wealth, Simplicity and Smartshares.

Inland Revenue will let members know who their new provider is, and members will be able to deal with their new provider immediately, although their funds may take a few months to be transferred.

More US women investing; outperforming men

A survey of US investors has found a big increase in the proportion of women investing outside their retirement savings since COVID-19, up from 44% in 2018 to 67% now.

Global financial services firm Fidelity Investments surveyed 1,200 women customers and found 50% had got more interested in investing since the start of the pandemic.

Around two-thirds said they are investing in shares, bonds and/or funds, 24% favoured sustainable investments, and 23% had bought cryptocurrencies

Further analysis of more than 5 million Fidelity customers found women had outperformed men by an average 0.4% per annum over the past decade.