The Cost of Not Getting Financial Advice in NZ 2026 (What 'Set and Forget' Really Costs You)

Skipping advice is not free. Advised Kiwis hold around 52% more in KiwiSaver. Here is what the wrong fund, the missed match, fee drag, and panic-switching really cost over a working life.

"Set and forget" sounds sensible. You ticked a box when you started a job, money goes in every payday, and you never look at it again. The problem is that doing nothing is not free. It is a decision, and in KiwiSaver it is usually an expensive one. The cost just never shows up on a statement, so most people never notice they are paying it.

This guide puts real numbers on the four hidden costs of skipping advice, shows what the New Zealand and global research actually says about the advised-versus-unadvised gap, and works through two identical savers to the dollar.

TL;DR: The cost of not getting financial advice in NZ is hidden but large. Advised New Zealanders hold around 52% more in their KiwiSaver than unadvised Kiwis ¹. The four leaks are: the wrong fund type for decades, a missed government and employer match, fee drag, and panic-switching in a downturn. Left alone, these compound into a six-figure gap by 65.

What does "set and forget" actually cost in KiwiSaver?

KiwiSaver is now a $123.1 billion scheme with almost 3.4 million members ⁴. It is the largest investment most Kiwis will ever hold, and yet it is the one most people never review. Four things go wrong when an account is left on autopilot. Each one is small per year. Stacked across a 30- or 40-year working life, they add up.

Cost 1: being in the wrong KiwiSaver fund type for decades

This is one of the most expensive mistakes in KiwiSaver, and it is invisible. Hundreds of thousands of Kiwis were placed in a conservative or balanced default fund when they joined, never moved, and have stayed there for years while they had 30 working years ahead of them.

The cost shows up in the long-run return assumptions every provider must use on your annual statement. These are the FMA/Sorted figures, after fees and tax:

The gap between a conservative fund at 2.5% and a growth fund at 4.5% is two full percentage points a year ¹⁰. On a lifetime of contributions, Sorted puts that difference at roughly $130,000 by retirement ¹¹. That is not a typo and it is not a market call. It is the cost of the wrong setting.

The good news is that Kiwis have been shifting. By the end of 2024, just under half (about 50–52%) of all KiwiSaver money sat in growth and aggressive funds, with another ~30% in balanced ¹². But "half" means the other half may still be too conservative for their age. If you are 35 and in a conservative fund "to be safe," safe is exactly what is costing you.

A 10-minute KiwiSaver health check tells you whether your fund type matches your timeframe, and you can model the difference yourself with our KiwiSaver growth calculator.

Cost 2: missing the full government match and employer contribution

Many people miss part of this match each year. From 1 July 2025 the government contribution was halved, from 50 cents to 25 cents per dollar you put in. The maximum you can now receive is $260.72 a year, and to get it in full you must contribute at least $1,042.86 yourself in the KiwiSaver year ⁶.

It is common to fall short of the $1,042.86 threshold without realising, usually after contributing on a low salary, being self-employed and paying nothing, or being on a contributions holiday. A top-up before 30 June recovers the full match; otherwise the unclaimed portion is lost for that year.

Two more 2025 changes catch people out:

• An income cap now applies: if your taxable income is over $180,000, you no longer get the government contribution. Members aged 16 and 17 became newly eligible, so the eligible age band is now 16 to 65 ⁷.
• On the employer side, the default minimum employee and matching employer rate is rising from 3% to 3.5% on 1 April 2026, then to 4% on 1 April 2028 ⁸. If you are an employee not contributing at all, you are walking past your employer's matching dollars too.

If you are self-employed or contracting and nothing is being deducted automatically, this is where match is most often forfeited. A KiwiSaver review catches it before the 30 June cut-off.

Cost 3: fee drag, the 0.7% you don't notice but pay every year

Fees are the cost you pay whether your fund goes up or down. Across the whole scheme, members paid $868.5 million in fees last year, which works out at about 0.7% of funds under management ⁵. On a $50,000 balance, 0.7% is roughly $350 a year, deducted quietly before the return you see is even calculated.

Half a percent sounds trivial. Over decades it is not, because you lose the fee and all the growth that fee would have earned. Here is what the same balance pays at different fee levels:

A higher fee can be worth paying if it buys a genuinely better after-fee return. The point is to compare like for like. The free Sorted Smart Investor tool from the Retirement Commission lets you compare every KiwiSaver fund's fees and after-fee returns side by side. The mistake is paying 1% for a fund that delivers no more than a 0.3% fund, which is what "set and forget" allows.

One more under-the-radar leak: your PIR. If Inland Revenue does not have a rate for you, your KiwiSaver income is taxed at the default 28%. Many lower earners should be on 10.5% or 17.5% and are overpaying tax inside the fund.

PIE income = income earned inside your KiwiSaver or managed fund (a portfolio investment entity). Your PIR is the tax rate applied to that income.

The wrong PIR is a leak you pay every year, on top of fees, and almost nobody checks it.

Cost 4: panic-switching in a downturn and locking in losses

The other three costs are about leaving money on the table. This one is about actively destroying it.

When markets fall, a balance drop on a statement feels unbearable, and the instinct is to switch to a "safer" fund to stop the bleeding. But a fall in your fund is only a paper loss until you sell. The moment you switch from growth to conservative after a drop, you turn a temporary fall into a permanent one, and you are almost always out of the market when it recovers fastest.

This was clear in early 2020. KiwiSaver members who stayed invested through the COVID crash recovered within months, while those who switched to cash near the bottom locked in the loss and then bought back in higher. No return assumption fixes that. It is one of the most damaging things an investor can do, and it happens far more often without an adviser to consult first.

Having someone to call before you switch funds is one of the highest-value parts of advice, and it is the part a calculator cannot provide.

The advised-vs-unadvised gap: what NZ and global research actually shows

The Financial Services Council's research is the clearest New Zealand evidence available.

• Advised New Zealanders hold approximately 52% more in their KiwiSaver than unadvised Kiwis, and save 3.7% more of their income ¹.
• FSC modelling found advised people receive on average a 4% better annual investment return, which over a full working life can compound into a materially larger balance by retirement ².

And yet uptake is low. The FSC found that while many Kiwis would consider taking advice, only about 18% actually receive it. The reasons are almost always the same two: roughly 62.5% think advice is too expensive, and about 65.2% think they do not have enough money to warrant it ¹. Both beliefs are usually wrong, and they are the exact reasons people stay on "set and forget" while the four costs above quietly run.

A worked example: two Kiwis, same income, what's the difference at 65?

Meet two 35-year-olds, both earning $75,000, both with $30,000 in KiwiSaver today, both contributing about $4,800 a year (employee plus employer plus the government top-up) for the next 30 years.

Aroha never touches her account. She is in the conservative default fund she landed in at 22, pays an above-average fee, and switched to cash for a year during a market wobble. Call her after-fee, after-tax return 2.5% ¹⁰.

Ben had a 30-minute review. He moved to a growth fund suited to his 30-year horizon, fixed his PIR, made sure he hit the full government contribution every year, and stayed invested through the wobble. Call his after-fee, after-tax return roughly 4.5% ¹⁰ — consistent with the FSC's ~4% advised uplift ².

Two identical savers, advised vs unadvised: projected balance at age 65

Same starting balance ($30,000), same income ($75,000), same ~$4,800 a year in. The only variable is the after-fee, after-tax return — 2.5% for the unadvised conservative path, 4.5% for the advised growth path. Projected on the FMA/Sorted assumptions ¹⁰, here is where each lands at 65:

Same job. Same income. Same contributions. The only difference is whether anyone helped set the dials, and it works out to about $131,000 by 65. Model your own two scenarios in the KiwiSaver growth calculator.

What advice costs vs what it can save

For most Kiwis, a KiwiSaver review with an adviser costs nothing out of pocket. Advisers are generally paid by the fund provider, not by you, and several providers, including Milford, offer free, no-obligation KiwiSaver advice even if you are not yet a client.

So the comparison is not "fee versus benefit." It is "an hour of your time versus":

• A two-percentage-point return gap worth ~$130,000 over a working life ¹¹.
• Up to $260.72 of government money a year, every year you miss the threshold ⁶.
• Hundreds of dollars a year in avoidable fees and the wrong PIR ⁵⁹.
• One panic-switch that permanently bakes a market drop into your balance.

When the cost is an hour and the downside of doing nothing is six figures, "I don't have enough to warrant advice" ¹ gets the maths exactly backwards. The less you have, the more every one of these leaks matters.

How a free review pays for itself

A proper KiwiSaver review does four concrete things in 30 minutes: confirms your fund type matches your timeframe, checks you are on track for the full government and employer contributions before 30 June, compares your fees and after-fee returns against the market, and fixes your PIR. If retirement is the real goal, it folds into broader retirement planning so KiwiSaver is not sitting in isolation.

You can start the easy way with our KiwiSaver health check, or just book a free 30-minute review and we will do the digging for you.

Frequently asked questions

Is "set and forget" ever the right strategy for KiwiSaver?

Only once the dials are set correctly. If you are in the right fund type for your age, on the right PIR, getting the full match, and paying a competitive fee, then staying invested and not fiddling is genuinely the best behaviour. The danger is "forgetting" before any of those are checked, which is where most people are.

How much more do advised Kiwis actually have in KiwiSaver?

Financial Services Council research found advised New Zealanders hold approximately 52% more in KiwiSaver than unadvised Kiwis and save 3.7% more of their income ¹. Separate FSC modelling put the advised return uplift at around 4% a year, which compounds into a materially larger retirement balance over a working life ².

What is the maximum KiwiSaver government contribution in 2026?

From 1 July 2025 it is $260.72 a year, paid at 25 cents per dollar you contribute. To get the full amount you must put in at least $1,042.86 yourself in the KiwiSaver year (1 July to 30 June), and you must earn $180,000 or less ⁶⁷.

How much am I paying in KiwiSaver fees?

The scheme average is about 0.7% of your balance a year, roughly $350 on a $50,000 balance ⁵. Low-cost index providers like Simplicity and Kernel charge closer to 0.25–0.30%. Compare your fund's fees and after-fee returns free on Sorted's Smart Investor tool before assuming yours is fine.

Does a KiwiSaver review cost me anything?

For most Kiwis, no. Advisers are generally paid by the provider rather than by you, and some providers offer free KiwiSaver advice even to non-clients. A 30-minute review is typically free and no-obligation.

I switched to cash during a market drop. Did I make a mistake?

Possibly, but it is fixable going forward. Switching after a fall converts a paper loss into a real one and tends to leave you out of the recovery. The right fund type depends on when you need the money. A review will tell you whether to move back and how to avoid repeating it.

General information, not personalised financial advice. Seek advice tailored to your situation before acting. Craig Smith Business Services Ltd (FSP712931), trading as Smiths Financial, holds a Class 2 licence issued by the Financial Markets Authority and is a member of the Financial Dispute Resolution Service (FDRS). Written by Henry Smith, Financial Adviser; reviewed by Craig Smith, Principal Adviser. Last reviewed 16 June 2026.