Last year the FMA teamed up with state-owned KiwiSaver provider Kiwi Wealth to run a trial using behavioural insights to tailor a letter aimed at getting new members to make an active choice.
Half of the 3427 participants received a standard welcome letter or email while the other half received the altered version which used prompts to drive people to change.
Of those who received the original letter 54 switched to an another fund while 80 members who received the new letter switched.
Those who received the altered letter were also less likely to switch to another provider.
Paul Gregory, director of capability at the FMA, said while the numbers were low the difference was statistically significant and if it was scaled up it could make a difference to the number who do switch.
"Making similarly simple and effective changes can help investors make better decisions. While the number of people switching in the trial is small, the result is statistically significant and could have a bigger impact if more broadly adopted."
The FMA's 2016 report showed providers who phoned new members had the most success in getting them to switch but for others where this was cost prohibitive or not possible because they did not have the contact details Gregory said this showed there were low cost, easy changes which could be made.
The regulator has sent its findings and the altered letter to all providers and is encouraging all managed fund providers to make use of the information.
Gregory said he hoped default providers were already working to actively engage their members.
The FMA does not have a target for how many default members it would like to see making an active choice but it expects to see an improvement.
He said providers who did not make an effort to engage with their members would attract a high level of interest from the regulator.
