KiwiSaver a difficult sell for RFAs
The FMA's stance on KiwiSaver distribution could make it difficult for registered financial advisers to sell KiwiSaver, the Institute of Financial Advisers says.
Wednesday, July 4th 2012, 6:00AM
by Niko Kloeten
The IFA has cautiously welcomed the FMA's latest guidance note on KiwiSaver selling, while pointing out some concerns, including around the problems RFAs might have keeping within the guidelines.
IFA President Nigel Tate said, "There's a lot they've got right. It makes it clear that Registered Financial Advisers might be able to distribute KiwiSaver in very tightly controlled circumstances if only giving class advice - but that is difficult to achieve.
"Advisers have faced uncertainty on this particular area for some time and now they have some clear guidance."
The IFA says the FMA has done well to provide clarity on the difference between class and personalised advice as well as the criteria they would expect an adviser to take into account when providing this service.
However, the IFA is wary about a couple of areas, Tate said.
"We think the issue of remuneration is a red herring because on its own it can't turn class advice into personalised advice," he said.
"We also are wary about the extent to which advisers will be required to advise on risk profiling. If they've got to do that then, in practice, how can an RFA sell KiwiSaver?"
The IFA will be submitting a response on behalf of its members during the consultation period but is also encouraging its members to consider the proposed changes and put in their own submissions.
Niko Kloeten can be contacted at firstname.lastname@example.org
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