November 18, 2021
Elizabeth Tsikanovski
All Blogs

Putting your Money where your mouth is; or how KiwiSaver is like a chocolate bar.

By Elizabeth Tsikanovski


 In this article, Velocity Finance Adviser, Elizabeth, discusses ethical investment options for your KiwiSaver funds, and how to choose them.



I am a huge and unashamed chocoholic. I am also a huge financial nerd – I love talking KiwiSaver, ethical investments and financial literacy. My guess however is that there are far more Kiwis who are going to share my love of chocolate than of finance, and unfortunately, both the number of chocolate bars you consume and, how well you understand KiwiSaver, are going to impact your wellbeing in later life.

The thing that really excites me in the KiwiSaver world is the explosion of ethical options.

Whether you care about the environment, housing, worker’s rights, animal welfare, or keeping NZ Nuclear Free – there are funds that will help you invest in what you care about.


Kiwis want ethical investment choices

The numbers show that most people want to invest in a way that aligns with their values, i.e., invest ethically. The difficulty lies in getting past the greenwashing, jargon, and overload of information. So, with all the above, and in a time poor environment, how many people really do put their money where their mouth is?

As consumers, New Zealanders can be very emphatic about what is, and isn’t, ok. For example, in 2009, Cadbury bowed to public pressure and changed their recipe to exclude Palm Oil. Personally, I found it a great incentive to switch my purchases from Cadbury to Whitakers, and I can’t say I’ve been tempted to switch back. Having said that, there is no requirement in NZ for food companies to declare Palm Oil as an ingredient, and no requirement on your KiwiSaver provider to declare whether they invest in palm oil either. So how do you know if you are investing in a way that aligns to your values?


There are more ethical investment options to choose from today

That’s why it’s incredibly helpful to have an adviser who can talk you through the particulars of your current KiwiSaver provider, or help you find one that is a better fit. For example, Booster Fund  recently expanded their list of exclusions from 7 to 15 areas in their Socially Responsible Investment funds, and one of the new exclusions is Palm Oil. Along with factory farming, livestock exports and whaling, so there are some easy wins for animal lovers there.

Booster have recently expanded their list of exclusions from 7 to 15 areas in their Socially Responsible Investment funds, and one of the new exclusions is Palm Oil.

That sounds great, but what does Socially Responsible Investing mean? What about ESG, impact investing and all the other jargon?


Let’s break it down into bite sized chunks.

No one wants to be the circa 2009 Cadbury of KiwiSavers, but back in 2016, a lot of them were. Fund managers were filling their portfolios with presumably profitable, yet unethical, investments. When it was revealed that many KiwiSaver providers were investing in cluster bombs and nuclear weapons (amongst other nasty items) the public outrage was palpable and the government moved to legislate that KiwiSaver providers avoid certain areas, primarily weapons manufacture.

In the last five years we have seen huge growth in ‘ethical’ investment choices for KiwiSaver providers, not to mention a significant media focus on the area. As pressure mounts for the Government to take action on climate change, KiwiSaver providers saw new regulation brought in last year, aimed at minimising investment in fossil fuels, as well as weapons. One could assume that over time, and as our social conscience focuses on new areas of concern, KiwiSaver funds will be subject to further regulation, and commercial common sense will prevail amongst fund managers to listen to public opinion.


Choosing ethical KiwiSaver investments

So, having established that Kiwis want more ethical options, it's up to you to ask yourself what brand of ethical fund you want. Are you a Whitakers fan; NZ owned and operated, wide range of flavours, solid and dependable? More inclined towards Lindt; international, sophisticated, great addition to a gift basket? Or proudly choosing the Wellington Chocolate Factory; artisan, great marketing, and relatively new on the scene?

If you’re like me and, depending on the day of the week, could go for all the above (or you’re the opposite, and find the whole topic nauseating) here are three ways to approach the decision.


How to choose a KiwiSaver fund aligned to your values and needs

1.      Talk to your financial adviser for expert advice and insight about provider options(the Golden Rule for all questions of finance)

2.      Use a tool such as or Mindful Money to check what companies your KiwiSaver funds are invested in, or find a fund that fits your values

3.      Check out the information on your KiwiSaver provider’s website and in the material, they provide you.


Understand the fund choices and the returns

Much like the ingredient list on the back of your chocolate bar, your KiwiSaver provider should be telling you the specific breakdown of investments in each fund, the fees, and the past returns, as well as what methods they use to screen their investment options.

Here are some possible methods you might come across:


Socially  Responsible Investment (SRI)       

An exclusionary  approach

Commonly excludes  areas such as alcohol, tobacco, gambling, weaponry.

A relatively blunt  but effective way to keep investments ethical

Environmental,  Social & Governance (ESG)

A proactive approach  to assessing investments

Involves more  research into the behaviour of companies and keeping up to date with changes  in management and policy

A step further than  SRI, but more labour intensive

Impact Investing

Targeting a specific  area to invest in for a social good outcome

Tends to be more  focussed on investing client money in one area to achieve a tangible goal

A narrower lens but  can be very appealing to consumers


Do ethical investments have good returns?

While there used to be concern that investing ethically meant sacrificing investment returns, this misconception has been addressed by the industry at large. Particularly in the last 18 months with the market dip and surge following the arrival of Covid 19 on the scene, we have seen that socially responsible funds  have coped well, and in some cases, outperformed their counterparts. Fees are unlikely to be related to how your money is invested, and will generally be applied across the provider’s funds, regardless of whether they are labelled ethical. What does affect fees is whether your fund is actively or passively managed – but that’s a different conversation. Thankfully there is now enough support for the statement that investing ethically doesn’t actually cost you more.

Following the arrival of Covid 19 on the scene, we have seen that socially responsible funds have coped well, and in some cases, outperformed their counterparts.


Closing words of advice when choosing your KiwiSaver fund

Finally, a few words to the wise for those carefully evaluating their KiwiSaver options.

Think of fees as the price point, and investment returns as the taste. If you only want to pay Homebrand prices, you’re going to end up with chocolate that stays in the pantry. In KiwiSaver terms, if you’re too hung up on fees, you may be sacrificing customer service, investment expertise, or ease of use. You may also find that when it comes to retirement or your first home, you’ve done yourself a disservice. Your adviser will provide insight and guidance on achieving the ideal balance between fees, returns and investments for your unique situation.

Your choice of fund is even more important than your choice of provider, as this is where the risk and returns come into play. Once you’ve established that Whitakers is your chocolate of choice, make sure you haven’t left the flavour to ‘default.’ Speak to your adviser to make sure you are in the right fund for your life stage needs and values and ensure that you know when to make appropriate changes as your life evolves.

Talk to someone with the expertise. KiwiSaver is only ever a part of the bigger picture. Your adviser can assist you in making informed decisions, for your overall financial wellbeing, based on your values and your financial situation.


The key similarity between KiwiSaver and a chocolate bar, is that they can both align to your personal values and tastes. The key difference? No matter how much money I put into my chocolate habit, my stash keeps dwindling, rather than growing!


About Elizabeth

Hi, I’m Elizabeth, one of the Financial Advisers here at Velocity Financial. I’m driven by my perpetual desire to improve outcomes for individuals, and eventually, communities. I am passionate about helping everyday Kiwis with their financial understanding, relieving their financial anxieties, and collaborating with them to create exciting possibilities for their future through good planning and robust advice.


Elizabeth Tsikanovski (FSP693611) is a Financial Adviser with Velocity Financial (FSP95466). No investment decision should be taken based on the information in this blog alone. Please see Elizabeth’s disclosure statement on our website.

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