Answering hundreds of calls a day from anxious KiwiSaver investors, Kiwi Wealth’s head of customer services Matt Beach paints a picture of how some New Zealanders are handling the Covid-19 downturn.
For essential services everywhere, from supermarkets to gas stations to toilet paper manufacturers, the overriding message of the lockdown has always been the same: don’t panic. We often make poor decisions when we panic, especially when it comes to money, and KiwiSaver investors are no exception.
The last few weeks have seen balances drop at alarming rates – nationwide, millions of dollars in savings have been wiped out in weeks. That uncertainty and shock has meant a lot of people have been frantically getting in touch with their KiwiSaver providers. And the customer service representatives, as the first port of call, have shared that stress with New Zealanders.
Matt Beach, who’s been managing Kiwi Wealth’s customer service team for the last five years, knows this experience all too well. He and his team have been busy fielding questions from New Zealanders all through the lockdown. In the week before the country went into lockdown they were taking 180-200 calls a day. During the first week of lockdown that rose to 600-700 each day. He spoke to The Spinoff about being on the customer service frontline during the lockdown and the financial pressure New Zealanders are feeling.
How have the last two months been for you and your team?
Because a lot of people aren’t used to investing and KiwiSaver might be the only investment they’ve ever had, they’re not used to seeing the value of their fund drop. So we’re having a lot of conversations with customers just reassuring them that markets have always gone up and down and that they haven’t lost anything in their fund until they withdraw.
What are people wanting guidance on when they call?
A lot of people have been getting in touch about whether they should change funds. They might be in a balanced or growth fund and that can have quite a high percentage in the sharemarket which means they’re seeing a bigger drop. So they’re asking us whether they should change their fund, or how they can go about changing their fund to a more conservative or cash-based portfolio.
Our general response to [switching funds] is to ask the customer if their KiwiSaver timeframe has changed. If they still have the same amount of time left until retirement, then switching into a cash fund may only serve to lock in any losses as a result of this market downturn. While being in a cash fund will mean their fund value is less affected if markets continue to drop, they will miss out on the growth potential during a market recovery. If their risk appetite and time frame has remained the same, our tools will always point to staying in the same fund during a market downturn, as long as they were in the correct fund to start with.
For example, we had a customer who was freaking out about how much the value of her fund had dropped. She was quite adamant that she was going to change to a more cash-based fund, but the trouble with doing that is you then crystallise those losses because you’re selling into one fund and buying into another. So we referred her through to one of our financial advisors who talked her through how she had another 20 years before she retires. In the end, she ended up staying in the fund she was in, which is good.
What sort of state of mind have people been in when they’ve been getting in touch? Are they stressed out?
A lot of people who are getting in touch are obviously concerned. We had one person say he was literally losing sleep over it. We ended up calling him and managed to have a deep, long conversation with him about what was happening.
But we also have people calling up and asking to increase their contribution which is interesting. Some people are looking at this and thinking it’s almost like shares are on sale at the moment, so they’re going to buy as many as they can now so that when things bounce back, the value of their fund will increase. There aren’t many of them though – there’s a much larger portion of people concerned about the value of their fund dropping.
The concern people have is pretty understandable given that even if you know that ups-and-downs are normal in investing, it’s still quite alarming to see that number drop so much and so quickly.
For sure! If I wasn’t in this job I’d definitely be calling up my KiwiSaver provider as well.
One of the things we try and point out when people call us and say they’ve lost $700 or $7,000 is we’ll go back to 2008 [when the GFC happened]. We can see that their fund value dropped considerably then as well, but they didn’t call us. Why was that? They’ll often say “I didn’t know about it!” But you can see that the returns they have made since the GFC have gone well above any value they lost in 2008. We are always eager for our customers to be engaged and contact us if they have concerns. A good starting point for the interactions we are having at the moment is using the GFC to show that markets dropping and increasing are something that’s always occurred.
As with everyone who’s having to work through the lockdown period, it must be quite a new and challenging time to be working in customer service right now. How has your team been handling this change?
We’re all working from home now, and it was sort of a mad dash to get everybody set up with IT. People were taking equipment home and it kind of looked like looters were let loose in our building at one stage! But we managed to set everyone up and we’ve really been pushing out our email and live-chat channels. We find it’s just the best way to service the larger amount of customers since a lot of inquiries are about the exact same thing, we can make use of templated replies and refer customers to blog posts and websites that can help.
It’s interesting because we’re actually getting through a large amount of work at home. We haven’t had any problems and a lot of the team are saying they quite enjoy working from home. They’re saying they can get up later, they can spend more time with their families, and that they don’t have to put on makeup! Obviously working from home has its challenges – some people miss the casual interactions from being in the office. But I think the team has been pretty happy working from home, and the general feeling from my team now is that we’ve got this.
When dealing with customers during the lockdown, have you had any particularly negative experiences?
One of the things with KiwiSaver is you can withdraw it if you’re in financial hardship. We always encourage that to be a last resort because if you take money out now it’s only going to amplify how much less money you have in retirement. But there are people in financial hardship, they’re stressed and struggling, and Covid-19 has added to that a lot. People have lost their jobs, they’re under pressure, so sometimes we’re having to deal with customers [in those situations].
We always try and be as empathetic as possible, but every now and again we get a customer that just doesn’t want to fill out a form or just wants the money transferred to their bank account straight away. But we have to follow the legislation. We try and get across to them that we’re doing all we can to help and that it’s in their best interest to get this done. But we don’t want to be taking abuse from customers, so if that’s happening, my team have got a rule that we just end the call or don’t respond to emails.
We completely understand why people are stressed and we want to try and help, but work with us, don’t argue with us. We’re not trying to be difficult.
On the flip side, have there been any positive or encouraging experiences that have stayed in your memory?
There was a story you guys did about the supermarket worker and reading that I think we’ve had a similar response, just getting a lot of people say to us, “look, we appreciate you being able to answer our queries and calming us down”.
For example, when we changed our forms to be PDF fillable since most people don’t have printers at home, straight away we had someone say, “thank you so much for listening to me, I appreciate you’re working hard to help me”. We’re adapting as we go, and if there’s something we can do to help the customer and we’re legally allowed to do it, then we definitely will.
This interview has been edited for clarity.
This content was created in paid partnership with Kiwi Wealth. Learn more about our partnerships here.