The KiwiSaver conundrum
In the first of a series reflecting on the year past Philip Macalister looks at the uncomfortable relationship between KiwiSaver and advisers.
Friday, December 28th 2012, 6:00AM 1 Comment
KiwiSaver is a bit on an enigma with financial advisers. Without KiwiSaver New Zealand’s funds management industry would largely be on life support.
The regular contributions are like being on a drip. The constant, and steady flow of money keeps many players alive.
However for advisers KiwiSaver is a conundrum. They know they should have some involvement but can’t figure out a way to make money out of it.
Yet KiwiSaver is a topic which, looking through what has been popular with readers this year, is popular.
There are many angles to it including about regulation and distribution side of the KiwiSaver.
Recently I went to one conference and the FMA speaker did his standard presentation then took questions. The audience of advisers made it very clear that they felt the regulations around KiwiSaver distribution were wrong.
On one hand they are being told they have to be AFAs and apply the highest standards to their business, and that they had to have AFA status to give advice around KiwiSaver.
On the other hand the FMA were letting non-AFA people, namely bank staff, flog KiwiSaver to customers and let banks switch customers from one KiwiSaver scheme to the bank scheme with no advice.
The FMA representative sounded genuinely surprised it was an issue and the depth of feeling. Indeed he even asked them to confirm
It was like one of those pinch yourself moments to see if you are awake.
At the same conference though an adviser – who shall remain nameless – gave a presentation on what he does with KiwiSaver. He made a commitment to the product and his clients collectively have around $20 million of funds under management.
In ASSET Magazine each month we profile an adviser and their thoughts around KiwiSaver. These are well worth a read and there are some who see the opportunities.
Do you agree or do you think other issues have been bigger? Let us know in the comments section below.
You can read Philip's blog here: http://www.goodreturns.co.nz/blog/
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