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ANZ, FMA work on changing behaviour

The FMA is working with ANZ to see if behavioural insights can prompt more ANZ KiwiSaver members to get retirement advice, or use retirement-planning tools, when they hit 56 years old.

Monday, May 8th 2017, 6:00AM 2 Comments

by Susan Edmunds

The pilot study is designed to examine if adjusting communications sent to ANZ KiwiSaver members at age 56, and users of their “lifetimes” investment approach, results in more members checking they are on track to achieve their retirement goals. The study also wants to find out if they take action or seek advice, if they are concerned they are not meeting their goals.

Recent FMA research shows New Zealanders who started retirement planning at least a decade before they left the workforce had the highest levels of confidence about funding their retirement.

Paul Gregory, director of external communications and investor capability at the FMA said: “This is why the pilot with ANZ is targeting 56-year-olds. They’re at a critical moment when they’re still far enough away from retirement to make a real difference with the decisions they make now.”

In 2016, the FMA published a paper outlining the value of behavioural insights in aiding good investor decision-making. Since then, the FMA has worked with two KiwiSaver providers to explore how improved interactions with their KiwiSaver members could prompt more frequent and better decision-making.

An earlier pilot, with Kiwi Wealth, focussed on decision-making around default funds.

Gregory said: “We hope both pilots will show real and positive outcomes for both investors and providers, prompting other KiwiSaver schemes to take on board these insights.

“We also think there are insights here for managed investment schemes in general.”

ANZ general manager of funds and investment Ana-Marie Lockyer said ANZ supported any moves to help members save for a comfortable retirement.

“ANZ’s lifetimes option automatically moves KiwiSaver members’ money into funds that are appropriate for their age,” she said. “But, everyone is different and it would be good to see if we can encourage members to take a closer look at their retirement savings plan while they’re still at an age where they can take steps to boost their savings.”

The ANZ behavioural insights pilot will run from May until the end of the year.

Tags: KiwiSaver

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Comments from our readers

On 10 May 2017 at 9:38 am Brent Sheather said:
When read the headline I thought for a split second that the FMA was at last putting retail investors interest first and was working with the ANZ to change its behaviour. Alas no such luck and vertically integrated organisations are still free to wreak havoc on their clients. I spoke with a university lecturer in Australia specialising in finance the other day and he described the big four banks as “defrauding their customers and generally visiting upon them service that is only a few steps above a war crime”.

He went on to say “I simply cannot see how a vertically integrated financial advisory service can ever be in the customers interest as there will always be pressure to recommend the banks own products and not the best products available”. Not really rocket science.

Meanwhile back in New Zealand the FMA has been compelled to say silly things like “putting clients’ interests first means different things for different people” and words to the effect that “if you only have junk to sell that’s all good with us”. Very sad, very embarrassing.
On 10 May 2017 at 11:04 am Pragmatic said:
Well said Brent. Yep - sad, but true: as Australian regulators contemplate harsher measures (via another Crown investigation) against vertically integrated financial service providers, NZ authorities prefer to turn a blind eye to questionable sales practices...

Whilst the immediate victims of this lazae faire approach will be consumers, the ultimate cost will be with the industry... or perhaps vice versa

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