The funds management industry, including KiwiSaver, has historically not done a very good job of making information available to investors, preferring instead to meet minimum regulatory reporting requirements.
Since inception in 1998, Booster has always tried to provide as much transparency as possible to investors and Financial Advisers, on the basis that this significantly helps people to connect more with their money. Unfortunately, this philosophy of transparency has not been widespread enough to allow investors to properly compare different investment management options.
But things are changing rapidly. For a few years now, the Financial Markets Conduct Act has required all managers of publicly offered investment funds to provide a quarterly and full update of all holdings. This was the main reason why the media was able to identify in August 2016 that almost all KiwiSaver funds had some indirect exposure, albeit very small, to controversial weapons such as nuclear and cluster bombs. As a result of the exposé, the industry was forced to either seek out or establish alternative global investment vehicles that excluded companies involved in such weapons, proving that knowledge is indeed power.
However, most New Zealanders don’t have the time to look through all the quarterly fund update disclosures of ALL funds (and there are hundreds of them). This is where Mindful Money and their new website tools come in. For the first time, investors can now quickly find out what exposure any of the current 216 KiwiSaver funds have to industries that might be considered unethical or not in the best interests of society or the environment.
Knowledge is power. Information is liberating. Education is the premise of progress, in every society, in every family.
Kofi Annan, Secretary General of the United Nations, Jan 1997 – Dec 2006.
Mindful Money has gone further than just providing this readily accessible information. It has identified ten KiwiSaver providers who they have determined as satisfying their responsible investment standards. Many of these, including Booster, have funds certified by RIAA as also meeting their exacting requirements.
In a time of unprecedented concern about climate change, New Zealanders deserve to know where their retirement savings are invested, and whether their investments are doing good or bad. There is a lot more work to be done, but through the efforts of Mindful Money and the commitment of responsible investment managers, we are at least giving New Zealanders a chance to connect more with their money and make a little bit of positive difference in the world at the same time.
And here’s a final bit of information. Evidence continues to show that by taking a more responsible approach to investing, you are more likely to improve your long-term investment returns than detract from them. Now that information must be liberating and that knowledge powerful!
1RESPONSIBLE INVESTMENT: NZ SURVEY 2018 - A report exploring New Zealanders’ attitudes towards responsible investment.