Indulge me, if you will!
I remember the first time I learned that banks could charge you for the privilege of holding your money, when my ex’s mother spoke about the $10 monthly fee on her day-to-day account.
More recently, I got to hear about some of the stuff that regulators are involved in within the consumer protection space. Changes to the law last year put a much bigger onus on lenders to disclose, disclose, disclose – to be upfront about fees and costs associated with credit contracts, as well as be more responsible and ethical about how and who to lend to. Noncompliance can apparently result in borrowers not being liable for fees/interest if lenders don’t play by the rules. And one finance company has been caught out charging excessive and irrelevant fees – eg high loan establishment fees due to building in overheads beyond the scope of any work involved with actually setting up a loan. The view is that lenders shouldn’t be making huge profits off these kinds of fees, to which I say amen.
Another much more mainstream topic of late has been KiwiSaver fees. On average KiwiSaver fees are 1.3% per annum and now that the scheme has been going for a few years, balances are getting higher and thus providers are getting an ever-bigger cut each year. There’s a new provider, Simplicity KiwiSaver, launching soon that will be totally passive – the international part will be handled through Vanguard. Given that I might be paying up to $40k in KiwiSaver fees over my lifetime, I’ll be keeping an eye on this to see if it’s worth switching. Maybe other KiwiSaver providers will up their game and sharpen up.
This week’s links
Still not quite sure how to answer this: What are you proud of?
What’s harder: saving or repaying debt?
Finally, I’m feeling this post on first home ownership so hard right now.
I do agree; disclosure is really important because you need the client/customer’s full, untainted consent for this or for that.
The amount of fees that our big banks charge is quite crazy and they are prime targets to be disrupted by new providers. It’s always good when a new player comes in and makes everyone reduce their prices (like Aldi did in Australia, the effects are still ongoing).
I hope the new Kiwisaver is a good one for you 🙂
Tristan