KiwiSaver passes NZ$140,000,000,000 and could reach NZ$10,000! Who should this vast pool of savings serve?

Can a fund manager succeed without aiming to make a profit?

In an industry that collects around NZ$1,000,000,000 in management fees each year, Simplicity has chosen a very different path: no shareholders seeking dividends, 15% of revenue donated to charity, and continually falling fees that pass the benefits of scale directly to members.

As KiwiSaver passes NZ$140,000,000,000, with the potential to reach NZ$10,000 over the coming decades, one question is becoming increasingly important: who should this vast pool of savings serve?

Today’s article explores how this unconventional fund manager is reshaping KiwiSaver in New Zealand.

Saving our way to prosperity: How Simplicity is reshaping KiwiSaver in New Zealand

New Zealand’s financial sector has never lacked confidence, but it often lacks “simplicity”.

When Sam Stubbs founded Simplicity in 2016, his aim was not to build a highly profitable fund management company. He wanted to disrupt the existing system. “I have no interest in making money for myself,” he says. “We wanted to build a charity-owned platform that passes the benefits of scale back to members.”

Today, KiwiSaver holds around NZ$140,000,000,000. In Sam’s words: “It won’t be long before it reaches NZ$10,000.” That scale is transformative. For the first time in modern history, New Zealand is beginning to save its way to prosperity.

And Simplicity has chosen to operate very differently within this system.

A non-profit model in a highly profitable industry

Finance has always been highly profitable. Sam puts it bluntly: “You don’t need much capital. A few chairs, a few desks and a few computers, and you can charge high fees.” KiwiSaver management fees alone amount to around NZ$1,000,000,000 a year in New Zealand.

Simplicity’s model fundamentally challenges this structure.

Owned by a charitable trust, the fund donates 15% of its revenue to charity. It pays no shareholder dividends because there are no shareholders seeking them. Instead, the benefits of growing scale go directly to members through lower fees. Over eight years, Simplicity has cut its fees seven times.

“Our fees are around a quarter to a third of our competitors’,” Sam says. “It’s that simple. We don’t make a profit; they do.”

This position outside the mainstream is deliberate. Sam believes the financial industry often makes things unnecessarily complicated to justify high profit margins. “Finance is a bit like a priesthood,” he says. “They like to make things sound complicated so you’ll pay someone to deal with them. But money itself is actually very simple.”

Transparency is central to this philosophy. Members can use a mobile app to see where every cent is invested, every day. Assets are held independently by the government-owned custodian Public Trust. “We never touch your money,” Sam explains. “We simply provide investment advice, while the money itself is protected.”

Giving back: making charity a core strategy

Since its establishment, Simplicity has donated around NZ$13,000,000 in total and currently gives approximately NZ$3,500,000 a year.

Members choose the donation categories every two years. The top three areas have remained consistent: homelessness and hunger, children in need, and environmental protection.

Interestingly, in a country where rugby almost defines national identity, sport ranks lowest. “Our members want money to go where the need is most urgent,” Sam says. “For their own generation and for their children and grandchildren.”

His goal is clear: to build one of the country’s largest charities.

Retirement: dignity, compulsion and system reform

In Sam’s view, KiwiSaver has three main functions:

1. Funding retirement, because money means dignity;

2. Helping people buy their first home;

3. Providing a financial buffer during difficult times.

But he believes the current system still has shortcomings.

New Zealand’s savings contribution rate is around 6%, compared with 12% in Australia. “We’re saving at about half Australia’s rate,” he notes.

More fundamentally, KiwiSaver is voluntary. Sam believes retirement saving should be compulsory, like paying tax. “If it stays voluntary, those who save will end up paying for those who don’t,” he warns. “Saving for retirement should be compulsory.”

He advocates gradual reform rather than abrupt changes. Increasing the contribution rate by 0.5% each year over 12 years would double the savings rate without creating sudden financial pressure. “This is a problem that has built up slowly,” he says, “so we can also use a solution that progresses slowly.”

He particularly emphasises the importance of starting young. If a child saves NZ$1 a day from birth, they will have around NZ$18,000 to NZ$20,000 by age 18. “Money gives you choices and dignity,” he says. “It can fund education or provide a starting point for buying a first home.”

His advice is simple:

1. Start early;

2. Contribute consistently;

3. Keep it simple;

4. Think across generations;

5. Make the most of compound returns;

6. Trust the power of long-term capital.

“Just start,” he says. “Find a dollar every day and see what happens.”

A perspective across generations

Simplicity’s philosophy is built on long-term thinking. As a non-profit, it will never be sold. “If you don’t make a profit, you have no valuation; without a valuation, no one will buy you,” Sam jokes. “We’ll always be here.”

He believes Simplicity’s thinking across generations closely aligns with Asian cultural values, particularly those of China. “They think about their children, grandchildren and great-grandchildren,” he says. “That’s our philosophy too.”

For him, the true measure of success is whether the next generation inherits a stronger New Zealand, rather than small differences in annual returns.

“We’re only just beginning to save our way to prosperity,” he says. “The next thirty years will be the best thirty years in New Zealand’s history.”