1 Comment 1 CommentThe issue of banks selling practice around KiwiSaver and how bank staff get customers to switch schemes has been a hot topic amongst advisers for some time. It was one of the reasons the FMA created a Guidance Note on KiwiSaver sales practices several years ago.
FMA head of supervision Kirsty Campbell told the Workplace Savings conference in Auckland that there had been an increase in complaints, and some of these had come from competitors. She said the regulator was looking at the issue and considering doing some research such as mystery shopping banks, surveys and talking to customers.
"We're probably going to do a little bit of all that stuff," she said.
Campbell said if the FMA could find "evidence of potential harm occurring" then “yes that is something we will take action over."
She said advisers and financial institutions have to "put your customer first."
Campbell said there had been stories where people switched providers without knowing it after being told they could see their KiwiSaver balance on their bank statement.
“We don’t want to see the do you want fries with that mentality.”
Campbell says the FMA is worried about KiwiSaver as it is a mass market product, and is the way many people "first time dip toes into the financial markets water."
"We want to make sure they get a good outcome," she said.
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To quote Kirsty "We're probably going to do a little bit of all that stuff."
What a joke, this has been public knowledge for a long time. When I had my FMA / AFA monitoring visit several years ago I gave the FMA direct feedback from my own clients on the Banks stripping activities.
Clients who had been put into Conservative Portfolios because "lots of other people are doing this" or younger clients getting ready to buy their first homes being put into High Growth with no risk or goal profiling whatsoever.
Many will have absolutely no idea as to how poorly they've been served until they realise what they've missed in returns over the years. Too late.
By that time Kirsty and her colleagues will have moved onto their next career step. Kirsty should become the FMA head of Observation as this would be a much more apt description of her lack of activity.