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KiwiSaver advice sparks complaints

Thirteen customers have complained about bank KiwiSaver sales and advice processes over the past year, the Banking Ombudsman says.

Thursday, October 20th 2016, 6:00AM 1 Comment

by Susan Edmunds

Nicola Sladden

The dispute resolution scheme has released its annual report, which shows it received 2458 inquiries in the year, up 2.6 per cent on the year before. Those inquiries led to 568 complaints, down 1.4 per cent. From there, 259 disputes were received, down 4.1 per cent.

A dispute is triggered when a complaint referred on by the Banking Ombudsman cannot be resolved by the banks.

Service-related issues were the biggest underlying cause of inquiries, complaints and disputes. This included things such as the failure of bank staff to act as instructed and concerns about debt collection.

Break fees on mortgages were also a cause of complaints, as were declined insurance claims.

Ombudsman Nicola Sladden said there were a number of complaints related to decisions about allowing early withdrawals from KiwiSaver.

But other bank customers complained about the quality of information that was provided when they switched funds or providers.

“We had 13 cases last year and some related to transfer of pension from Australia, and others being signed up to KiwiSaver without full knowledge or understanding the implications.”

She said the Financial Markets Authority’s guidance should help.

The FMA has indicated that it is aware that some banks are struggling with how to offer more than printed information on KiwiSaver within the constraints of the Financial Advisers Act, and will offer them more assistance to help them comply.

Banks told Good Returns it was sometimes hard to offer personalized advice within the confines of a QFE structure.

“All financial service providers are committed to improving the quality, simplicity and clarity of the information provided to customers and that’s something we would certainly support,” Sladden said.

She said the 13 complaints was not a noticeable increase from earlier years.

Tags: banks KiwiSaver

« Banks tackle KiwiSaver advice questionKiwiSaver risk reward just 2.1% »

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Comments from our readers

On 20 October 2016 at 2:51 pm R1 said:
"Banks told Good Returns it was sometimes hard to offer personalized advice within the confines of a QFE structure."

So let's scrap QFE focus on selling and have AFA's only providing advice to clients and applying the same standard of 'putting the clients' interests first as all AFAs.

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