by Susan Edmunds
Many advisers have said it is hard to make a living from KiwiSaver, and the amount of time spent on helping clients with the Government savings scheme was not reflected in the commission they would earn.
Advisers get, on average, a trail commission of a quarter of a per cent of the fund balance and an introduction fee of about $25. That means an adviser whose client had $10,000 in KiwiSaver would earn $25 a year from that client.
But Henry Tongue, of Generate, which deals with RFAs, said most people would not feel the need to talk to their adviser every year, especially if the communication from their provider was good.
“Some people, particularly those with large balances, will want to discuss their KiwiSaver more regularly perhaps as part of a wider asset portfolio review…Advisers can make KiwiSaver as big or small part of their business. The advisers we work with generally find their clients very receptive to taking KiwiSaver advice, especially when they find out that the advice they are going to receive could have a meaningfully positive impact on their retirement.”
Massey University banking expert Claire Matthews said it would come down to individual preference. “I wouldn’t think any more than every six months would be required.”
Advisers might also need to check in with clients in May, to make sure they put enough into their KiwiSaver accounts to get the full member credit from the Government. “There’s no point doing a review in August and saying ‘by the way, you missed out’.”
Matthews said advisers should not be encouraging members to change KiwiSaver scheme or fund on a regular basis. “But every 12 months you could ask: Are you still in the right fund, with the right provider?”
She acknowledged there was not a lot of money in KiwiSaver for advisers. “That’s one reason why you wouldn’t want too frequent reviews but in large part it’s because clients wouldn’t want them.”
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