KiwiSaver advice ‘isn’t rocket science’
Questions have been asked over whether unnecessary hurdles for advisers are preventing consumers getting access to advice on KiwiSaver.
Friday, April 20th 2012, 6:44AM 10 Comments
by Niko Kloeten
The issue has been raised with the Financial Markets Authority by a Registered Financial Adviser, who spoke with Good Returns on the condition of anonymity.
The adviser thought he had all the required qualifications to become an Authorised Financial Adviser, only to discover that he only met the criteria for becoming a “category two” AFA.
Category two AFAs are unable to provide advice on category one products such as KiwiSaver; in order to advise on KiwiSaver he would have to also complete a paper on ‘portfolio design’.
The adviser, who said many of his clients were on modest incomes, questioned why advisers had to learn portfolio design in order to help people pick a KiwiSaver scheme.
He said he just wanted to be able to advise on KiwiSaver and provide budgeting advice; if clients wanted a full-blown investment plan he would refer them to a financial planner.
“KiwiSaver isn’t rocket science; it’s actually quite simple. As an RFA I can advise on a million-dollar life insurance policy but I can’t help someone with KiwiSaver; there’s a double-standard there.”
The adviser said before the regulations his business was “about 99% risk, with a little bit of KiwiSaver advice on the side”, but now many of his clients were missing out on KiwiSaver advice altogether, due to being unable to afford the services of an AFA.
“An AFA isn’t going to drive out to South Auckland in the middle of the night to help someone with their KiwiSaver for $40.”
Niko Kloeten can be contacted at firstname.lastname@example.org
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