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AMP KiwiSaver Scheme Review

​Our guide to the AMP KiwiSaver scheme looks at the fund choices, fees and options available to KiwiSaver members.
​Updated 25 June 2024
Summary
  • In 2020, AMP overhauled its KiwiSaver scheme, slashing fees and moving the investing style and management to index-based funds. This Stuff.co.nz article outlines the changes.
  • AMP KiwiSaver is one of KiwiSaver's largest schemes, with around $6.5 billion under management as at March 2024 and with 21 investment options to choose from, few other providers offer more variety.
  • ​Our review outlines what the AMP KiwiSaver scheme is, what funds it offers to KiwiSaver members, and how they're different to other funds, as well as looking at alternatives and the level of fees involved.
 
Please note: MoneyHub is not a Financial Adviser, and this guide has been published to explain the investment fundamentals and outline the pros and cons of AMP as a KiwiSaver investment option.
​
We cover:
Performance:
  • ​When reviewing your KiwiSaver options, it is important to make informed decisions based on reliable data. You can use the Morningstar KiwiSaver Survey to check the performance of various KiwiSaver funds. This free resource provides comprehensive insights into the performance and rankings of different funds, helping you compare and contrast your options effectively.
  • Interpreting these reports can sometimes be challenging, but tools are available to help. Our video offers a step-by-step guide to reading and understanding the quarterly Morningstar report. It walks you through the key aspects of the reports, ensuring you can make sense of the data presented and apply it to your KiwiSaver decision-making process.
  • Using these resources together can provide a thorough understanding and assist in making more informed choices about your KiwiSaver investment.
Read this First: Fees, Performance and Understanding What's Best For Your Situation
  • A lot of media attention focuses on KiwiSaver fees, but this is only one thing to consider when picking the most suitable provider and fund for your retirement needs.
  • We believe that being comfortable with what you're investing in is the most important aspect of saving for your retirement, not the fee you'll pay.
  • While we don't focus on the latest returns, we encourage readers to make their own comparisons using the quarterly Morningstar KiwiSaver Survey.
  • Ultimately, deciding upon whether AMP KiwiSaver is right for you will most likely come down to your interpretation of the fund performances in the medium term, their investment strategy and their fees.

The Specs of the AMP KiwiSaver Funds - fees, risks and explaining where your money is invested


​The lowest fee is 0.58% p.a. (AMP Cash Fund) and the highest fee is 1.65% p.a. (Milford Active Growth Fund).

Video Overview: 
  • ​In the video below, MoneyHub Founder Christopher Walsh walks you through the detailed outlines of various AMP KiwiSaver funds, including the Milford Active Growth Fund. Understanding the specifics of each fund is crucial for making informed investment decisions and maximising your KiwiSaver performance.
  • The video outlines the performance, fees, investment strategies, and historical returns of selected funds to help you understand how these funds operate, their potential benefits, and any associated costs.

Know This: AMP Charges More Than Going Direct to Underlying Fund Managers

When comparing the annual fees for Milford funds offered directly with those offered through AMP, it’s evident that AMP charges significantly higher fees. To explain this with numbers, we look at the Milford KiwiSaver Plan fees charged directly by Milford and those charged by AMP.​

Milford Active Growth Fund:
Milford Aggressive Fund:
Milford Balanced Fund:
Milford Conservative Fund:

AMP KiwiSaver in the News

Relevant media stories highlight the following:

  • AMP has seen a significant outflow of assets, with $1 billion moving to other providers after losing its KiwiSaver default status. Despite an 11% increase in net profit to $42 million for the year ending December 31, 2021, AMP anticipates lower profits next year due to margin pressures and changes in insurance arrangements.
  • Its assets under management grew to $6.1 billion, maintaining a substantial presence in the KiwiSaver and corporate superannuation markets, though net cash outflows totaled $1.1 billion.
- More than $1 billion walks out the door at AMP, GoodReturns.co.nz, February 2022

  • AMP has been one of the worst-performing providers. Over a 10-year history (2008-2018), it generated the lowest annual returns among conservative, moderate, balanced, growth, and aggressive classes. In all but the conservative option, its fees were above average. 
  • AMP's assets under management still grew to $5.43 billion as at September 30, from $5.08 billion at the start of the year. However, its market share shrank to 10.5 percent from 12.1 percent.
- How does your KiwiSaver fund stack up?, Newsroom.co.nz, October 2018

  • A survey by Consumer NZ said most KiwiSaver Providers  all had a drop in their (customer service) ratings.
  • Only 36 percent of ASB customers were satisfied with the service, while AMP and ANZ also scored low at 37 and 41 percent.
- Low satisfaction rates for big-three KiwiSaver providers, RNZ, April 2019

  • "The three worst-performing funds belonged to AMP KiwiSaver, with their Nikko AM Growth, ANZ Growth and LS Growth Fund moving down 1.98 per cent, 1.54 per cent and 1.29 per cent in the period respectively," researcher Christopher Walsh (MoneyHub.co.nz) said.
- All but four KiwiSaver growth funds lost money in past six months, Stuff.co.nz, December 2018

Who is the AMP KiwiSaver Scheme Suited To?

Despite recent fee decreases, we believe there are better KiwiSaver schemes available. Currently, AMP's offerings do not seem to provide significant value. However, it's important to note that the long-term impact of the fee reduction on returns has yet to be seen, so it is too early to draw definitive conclusions.
​
Pros
  • A wide selection of funds - no KiwiSaver provider offers more.
  • Investments are diversified and include cash deposits, NZ government bonds and NZ corporate bonds, New Zealand shares and global equities.
  • Lifesteps offers investors a range of age-related funds, automatically investing younger investors into growth assets and, conversely, older investors into wealth-protecting income assets.
  • AMP offers a responsible investment fund, which combines financial analysis with a sustainability focus.
  • Investors have access to a mobile digital app called My AMP which keeps track of individual AMP KiwiSaver scheme accounts.

Cons
  • The scheme has historically underperformed the market, and the externally managed funds offered by AMP KiwiSaver are more expensive than going directly to fund managers such as Superlife and Milford.
  • While the changes in 2020, including the reduction in fees and shifts in management approach, are gradually addressing past performance issues, AMP's fees remain higher relative to other KiwiSaver schemes, making them less competitive.

Be aware:
  • As with any investment, markets go up and down. The Dotcom bubble in the early 2000s sank global sharemarkets, as did the 2008 Global Financial Crisis. While many global sharemarkets are now at record highs, this is no guarantee of future earnings.

8 AMP KiwiSaver Scheme Facts

AMP is one of the largest KiwiSaver schemes

AMP was one of the first KiwiSaver schemes to market back in 2007, and has over 230,000 members with more than $6.5 billion invested. Yet, bigger isn't always best, and AMP has been criticised repeatedly in the past for over-charging and under-performing when compared to other KiwiSaver schemes. It overhauled its scheme in 2020 to address these issues.

No matter what your employer's default KiwiSaver provider or fund is, you are entitled to select AMP as your KiwiSaver scheme

Your employer may offer another KiwiSaver provider as their preferred provider, but you are free to choose AMP KiwiSaver as your provider if you feel it's right for you.

If you join the AMP KiwiSaver Scheme through a preferred provider arrangement then it is likely you will be defaulted into Lifesteps. This is because most employers have chosen Lifesteps as the "default" option. More information abotu Lifesteps is outlined on the AMP website.

Like most providers, AMP charges two fees, and there is no minimum investment

No matter what your fund is, as an AMP KiwiSaver member, you'll pay a streamlined fee, which ranges between 0.58% p.a. (AMP Cash Fund) and 1.65% p.a. Milford Active Growth Fund.

If you want to contribute to your fund at a level above your fixed salary contribution, you can do this via the online banking or manually by contacting the client services team. If you stop contributing, you will still pay both fees.

Dividends your fund receives are reinvested, meaning more cash is invested on your behalf

Many of the AMP KiwiSaver funds invest in shares, and many will pay dividends. These cash payments represent the profits from companies returning it to the shareholders, i.e. you. When a company declares a dividend, your fund will receive money, and it is re-invested into more shares, growing the value of your fund. Despite being a cash payment, and as is the case with all KiwiSaver funds, there is no option to take this money as cash until you turn 65. 

All of AMP's KiwiSaver funds are passively managed index funds

AMP makes it clear in their KiwiSaver marketing - "We use an index investing approach and diversified investment portfolios to replicate the broader market performance, which spreads risk, delivers value over the long term and minimises buying and selling to keep costs down".

This approach involves tracking specific market indices, ensuring that the performance of the funds closely mirrors the overall market. By focusing on passive management, AMP aims to offer a low-cost investment option, minimising fees and maximising returns for investors.

As outlined in our guide to index funds, key benefits of passively managed index funds:
  1. Lower Fees: Passive management typically incurs lower management fees compared to actively managed funds, as there is no need for extensive research or frequent trading.
  2. Market Performance: By tracking a market index, these funds provide returns that are in line with the broader market performance, reducing the risk of underperformance due to poor stock selection.
  3. Diversification: Index funds invest in a broad range of securities within the index, offering investors a diversified portfolio that can help mitigate individual stock risks.
  4. Simplicity and Transparency: The investment strategy of index funds is straightforward, and investors can easily understand where their money is allocated and how it is performing.

​Signing up to AMP isn't complicated, and you can pick more than one fund

Signing up to the AMP scheme is easy, and you can create your own portfolio of investments by choosing any combination of the funds. You can choose just one fund, or you can mix and match up to seven funds to spread your KiwiSaver investment across.

If you don't select any fund or funds, your contributions will be invested in AMP Lifesteps fund that corresponds to your age. Generally, if you're looking for a safe investment with the lowest risk of seeing your original investment fall, a conservative fund could be a suitable option. But many investment professionals would suggest being in a conservative fund for the long term. If you're looking for a higher return and are prepared to have your money in higher-risk investments which could fall in value, balanced and growth funds operate in this manner.

The performance data is easy to follow, and updated regularly

​Fund performance details are published on the AMP website every three months. Unit prices, which track the performance, are updated daily. And, as a member, you can also check a fund balance 24/7 by logging in to the AMP website or downloading the MyAMP mobile app.​

AMP previously made a lot of news

AMP has, historically, appeared in the media for all the wrong reasons - many journalists and financial commentators have seen it as an under-performing scheme. However, the changes launched in 2020 are working to reverse this - we continue to update this review as appropriate.

Frequently Asked Questions

What types of funds does AMP KiwiSaver offer?

AMP KiwiSaver offers 21 investment options, including conservative, moderate, balanced, growth, and aggressive funds. Each fund has a unique investment strategy and risk profile, catering to different investor needs and risk appetites.

How are the fees structured for AMP KiwiSaver funds?

AMP KiwiSaver charges an annual member fee of $23.40 on top of the annual management fee for each fund. Management fees vary by fund. Please be aware that AMP charges higher fees for some externally managed funds like those from Milford when accessed through AMP than when investing directly with Milford.

Investing directly with Milford can be more cost-effective. For example:
  • Milford Active Growth Fund: 1.05% p.a. (direct) vs 1.65% p.a. (via AMP)
  • Milford Aggressive Fund: 1.15% p.a. (direct) vs 1.50% p.a. (via AMP)
  • Milford Balanced Fund: 1.05% p.a. (direct) vs 1.36% p.a. (via AMP)
  • Milford Conservative Fund: 0.85% p.a. (direct) vs 1.25% p.a. (via AMP)

What changes did AMP make to its KiwiSaver scheme in 2020?

In 2020, AMP revamped its KiwiSaver scheme by reducing fees and shifting to an index-based investment approach. This change aimed to improve performance and lower investor costs using a passive management strategy that tracks market indices.

How does the Lifesteps fund work in AMP KiwiSaver?

The Lifesteps fund automatically adjusts your investment allocation based on your age. Younger investors are allocated more towards growth assets, while older investors are shifted to more conservative investments to protect their wealth as they approach retirement.

What is the investment strategy of AMP's KiwiSaver funds?

AMP's KiwiSaver funds primarily use a passive investment strategy, tracking specific market indices to replicate broader market performance. This strategy aims to spread risk, deliver long-term value, and keep costs down by minimising active management and trading.

How can I track the performance of my AMP KiwiSaver funds?

AMP provides quarterly performance reports on its website, updating unit prices daily. Members can check their fund balance 24/7 by logging into the AMP website or using the MyAMP mobile app.

How do I sign up for AMP KiwiSaver?

Signing up for AMP KiwiSaver is straightforward. You can select from a range of funds or create a custom portfolio by mixing up to seven funds. If you don't make a selection, your contributions will default to the AMP Lifesteps fund based on your age.

Our Conclusion​

  • AMP KiwiSaver has struggled with its reputation in terms of fund performance, customer service, and fees. Despite offering various funds, more attractive investment options can often be found with other providers.
  • Historically, AMP has been one of the lower-performing providers. With the AMP Milford KiwiSaver fees being well above what Milford charges if you go directly, there's an immediate cost drag by selecting AMP KiwiSaver.
  • While AMP has made efforts to improve, including fee reductions and changes in management strategy since 2020, these adjustments have not sufficiently closed the gap. Many investors remain wary, as evidenced by AMP's declining market share, as customers look for better-performing KiwiSaver schemes.
Related Resources:
Do you have experience with AMPs KiwiSaver scheme that you would like to share with our readers? Email our research team who would be delighted to hear from you.