Inside Money: New KiwiSaver relationship blooms for BNZ

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As has been well-established by now, KiwiSaver has become mainly a plaything of the banks.

According to my back-of-an-envelope calculations, banks manage about two-thirds of KiwiSaver funds (and that would head up to around 80 per cent if you include the recently-merged Tower/Fisher operations that now has TSB Bank on board as a major shareholder). Only the combined AMP/Axa behemoth provides any kind of substantial resistance to the bank stranglehold on KiwiSaver, claiming around 15 per cent market share.

Distinguishing AMP/Axa in this way is a technical nicety, really: AMP (inclusive of Axa, although that brand name has now been wiped from official consciousness and physical expression), like our banks, is a huge Australian-dominated financial institution with a strong, tightly-controlled distribution force.

However, since BNZ launched its own scheme this February, AMP's distribution reach into KiwiSaver has been somewhat diminished. Previously, BNZ sold both the AMP and Axa KiwiSaver schemes (one to personal and the other to business customers) through its network.

This was always a slightly odd situation, and one that turned weirder after the National Australia Bank's (BNZ's owner) do-or-die battle with AMP for the hand of Axa a couple of year's ago.

But it seems BNZ's heart was never really in AMP/Axa KiwiSaver redistribution business anyway. According to industry sources, over the five years BNZ was selling the AMP/Axa schemes it signed up about 8,000 customers. By comparison, the single largest bank scheme, ASB, reached more than 300,000 members over the same period.

BNZ, however, is moving a little faster now it has its own KiwiSaver product to promote: post-prospectus (late February) the bank has amassed 8,532 members and $22.5 million in funds under management as at Friday April 5, a BNZ spokesperson says.

Unlike during its unenthusiastic de facto polyamorous relationship with AMP/Axa, BNZ seems committed to spending quality time with its new KiwiSaver partner: amazing what a little love can do.