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When you make a decision to invest in a KiwiSaver scheme, you have a variety of information and documents available to you.
From pages on a website to performance information and a "statement of investment performance objectives" explaining the rules around how money is invested.
There is also something simply called "other material information" or OMI for short. It is easy to feel uncertain of where to start.
The essential thing you need to read is the product disclosure statement for the KiwiSaver scheme you are considering.
A product disclosure statement (PDS) is a regulated document which outlines important information to investors across 10 sections.
Word-count limits apply, so make yourself a cuppa and settle in for a 6000-word read.
A PDS always starts easy with a key information summary before getting into further important information about how the investment works, what the investment options are, the risks of investing and fees and taxes you pay.
While you will want to consider the fee information closely, in my opinion it is also important to consider the performance delivered after fees and tax at your prescribed investor rate.
This is information contained outside the PDS, commonly on a performance section of a KiwiSaver provider’s website.
As always when considering performance, remember to consider this relative to the risks involved with different investment strategies (some are higher risk than others).
A PDS also outlines who is involved in bringing the KiwiSaver scheme to you, how you can complain when you have a problem and where you can find more information.
As an investor, this is all important information that you want to know.
A PDS concludes with an application form and within that there will be specific account terms and conditions that you will want to pay attention to. These terms will govern the specific operation of your account, including privacy considerations.
While a PDS is unlikely to make the top 10 best-sellers list this month, reading the PDS helps put you in charge of your money by understanding more about how your investment works and what your choices are.
The PDS should be easily found on your provider’s website and if it is not prominently displayed, a quick site search for the phrase should quickly reveal it.
When looking at the PDS, something else that you may wish to look for is if it has a WriteMark.
Launched in 2005, the WriteMark is an objective standard created so someone can readily tell if a communication is in plain language.
A WriteMark stands as a quality mark for clear communications and is awarded to documents or websites that achieve a high standard of plain language.
Achieving a WriteMark shows that a document has been checked against rigorous criteria, that it is focused on the needs of the intended audience and that it is easy to read, understand and act on.
In a field known for its complexity, a document with the WriteMark can help make investing more accessible.
You should not have to be a financial expert to understand the information that a PDS contains and how it applies to you.
So jump online, download a copy and spend some time working through the PDS from your KiwiSaver provider.
If there are questions left after reading it, make sure you take the time to call and chat them through, so you can make informed decisions about your future; because KiwiSaver is real money and it’s your money.
- Trish Oakley is head of Summer (Forsyth Barr’s KiwiSaver scheme). This is not a recommendation to buy or sell any financial product and does not take your personal circumstances into account.