Several union-based KiwiSaver schemes remain in business but between them the four included in this survey – all, oddly, in water-based industries – could only muster 354 members as at March 31. Likewise, the PSBG (representing engineers, architects etc) and the Law Society KiwiSaver schemes, with 122 and 273 members respectively, show the challenges professional bodies face in gaining super scale. KiwiSaver, instead, is almost exclusively a battleground for financial institutions where marketing and distribution are the favoured weapons.  Distribution, for now at least, holds sway, which becomes apparent in a number of ways:

• Australian-owned banks, only one of which is a default provider, take up four of the top five spots in membership numbers (although only two make the top five by funds under management); • Default status, the government-mandated distribution system, has given an obvious free-kick to the six approved providers with all of them in the top 10 by members and funds under management. However, most default providers are having trouble holding on to members with five of the six experiencing massive transfer outflows to other schemes. It’s notable that the single bank in the list of default providers, the Commonwealth Bank-owned ASB, is the only one to show net positive transfers from rival schemes; • The associated networks of sharebroking firms (Forsyth Barr and Craigs) and one financial advisory group (Grosvenor) have shown smaller-scale distribution can keep a reasonable-sized KiwiSaver scheme afloat. Superlife, predominately via its existing employer relationships, has also found a comfortable niche.

Interestingly, Medical Assurance is the only profession-based group to have built a substantial KiwiSaver scheme. Marketing has had its moments of KiwiSaver glory, too, and can best be divided into a couple of broad strategies: • Personality-driven approaches, most notably pursued by Gareth Morgan and Carmel Fisher, both of whom feature in the top third of providers by funds under management; • Employing a large salesforce – epitomised by two New Zealand-owned battlers Huljich and Fidelity, which were number one and two respectively by membership growth rate in the year to March 31, 2010. Huljich is the standout in this category, growing its funds by a staggering 624 per cent over the year.  While the sales strategy has worked well for Huljich and Fidelity it should be noted that they also round out the bottom two places by average funds per member.

Despite the marginal state of many schemes, to date only three other KiwiSaver providers have followed Eosaver and IRIS out of the market in 2010: the bizarre Real Property scheme; stockbroking firm First New Zealand Capital, and Asteron. As at March 31, Asteron with more than 6,500 and $34 million under management – and growing both at a reasonable rate – was the only KiwiSaver scheme of some substance to close. At the same time four new providers entered the fray this year: KiwiBank, New Zealand Funds Management, Milford Asset Management, and the Exclusive Brethren-run BCF scheme.  As new members continue to pile into KiwiSaver the broad market growth will probably sustain the hopes of smaller players for some time. However, providers are increasingly targeting members of rival KiwiSaver schemes to boost numbers. Because members can switch schemes at any time the temptation to poach from rival providers is proving irresistible.