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Advice key part of KiwiSaver success: ANZ

Advice is important to make sure New Zealanders get the most out of KiwiSaver, the country’s biggest provider says – but it suggests much of it should be supplied free.

Tuesday, September 5th 2017, 6:00AM 7 Comments

ANZ has released a survey and whitepaper to mark the 10th anniversary of the retirement savings scheme.

It called for the scheme to be made compulsory, for providers to be required to offer free savings advice to members and help for those in the decumulation phase.

It said the need for advice was apparent in the results of a survey of 1000 people,  which showed most had not even worked out how much they were likely to have saved by 65. More than 20% said that was because it was too difficult to do so.

The survey found 28% of respondents said it was best for KiwiSaver funds to be made available as a lump sum at 65. Another 19% thought it was best in installments. More than 40% said a combination would be best.

Almost 30% said they wanted their KiwiSaver provider to give them a set of regular withdrawal options to choose from at retirement, but 62% wanted access to free professional advice.

ANZ said roboadvice would play a bigger part in future advice for KiwiSaver members.

A third of respondents would prefer to get retirement savings advice from a person and 31% said they would use a sophisticated online calculator, either alone or with someone helping them. Just under 20% said they would prefer just online tools and 16% wanted a DIY approach.

Members with little knowledge about KiwiSaver were more likely to want advice from a person, at 47%.

ANZ said the government should also provide some guidance around assumptions and parameters regarding roboadvice to make sure there was consistency in the provision of mass-scale advice.

“At ANZ, we offer free financial advice to ensure members can continue to benefit from exposure to markets, with the right risk profile for their retirement circumstances,” ANZ said.

“We also promote use of the regular withdrawal option to discourage people from impulse buys or reallocating their money to misguided investments. While this is a good first step, there’s still plenty more the government and financial services industry can do to help educate New Zealand’s ageing population on how best to decumulate to achieve a comfortable retirement lifestyle.”

ANZ recommended that KiwiSaver providers be required to check in with members a year after they withdrew money for a first home and encourage them to seek advice. 

It said providers should also encourage female members to get personalised advice.

"The government and financial services industry should work together to enhance the financial capability of New Zealanders receiving NZ Super. This could be in the form of a comprehensive information pack that accompanies SuperGold cards, with directories on where to access financial advice, and a range of investment and decumulation options available to them."

 

Tags: ANZ financial advisers KiwiSaver retirement roboadvice

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Comments from our readers

On 5 September 2017 at 8:03 am John Milner said:
A rather sell serving survey by ANZ. Although I don't provide KiwiSaver advice (I have to make a living sorry) I have yet to meet a client of ANZ or any other bank that either understands what they have, why they have it or are working to a plan. Free advice is just that - free of advice.
On 5 September 2017 at 8:17 am Brent Sheather said:
Don’t you love it when vertically integrated organisations pontificate about doing the right thing and ethics. Look at ANZ’s latest effort :“At ANZ we offer free financial advice” to KiwiSavers. ANZ might have added “where said financial advice is limited to just recommending our own relatively high cost KiwiSaver product”. The ANZ’s comments remind me of a similar ironic outburst, also from an Australian based vertically integrated organisation, where the Chief Executive criticised the payment of bonuses and incentives in the financial planning area. At the same time he pocketed about $13m personally in bonuses that year.

It amazes me how the banks in particular are able to spin reality, where the reality makes them look bad, in such a way that they look like saints. Probably a PhD thesis here for someone doing a BCom, majoring in fake news.
On 5 September 2017 at 9:36 am Dirty Harry said:
62% wanted access to free professional advice.
Yeah? And how's that working out for them so far? They haven't had advice, don't know how much they need to save, don't know how much they are going to save, don't know how KS actually works, don't know how or what to decumulate, don't know how to pick a fund or a provider and don't know how to find Good Advice.

So of course ANZ are working on a Robo "advice" platform - they already have one - an army of not-on-commission polo shirted NR's programmed and KPI'd to dispense "advice".

It's up to advisers individually and as a collective such as FANZ to educate the public that SOMEBODY is paying their "free (lol)" adviser. If it's not the client themself, then the client is not the master and they have probably not received Advice, they have received "advice".
On 6 September 2017 at 3:07 am NormanStacey said:
Free Advice is invariably over-priced
On 6 September 2017 at 6:39 am retired blogger said:
Free advice is worth about the same as it costs
On 6 September 2017 at 11:41 am Pragmatic said:
I’d like to put a slightly different spin on this conversation by observing some of the offshore trends amongst larger financial institutions. In short, many larger financial entities are desperately working on technology strategies to disintermediate the investor relationship, and target consumers direct. Many have figured out that distribution and administration is a zero-sum game (for them at least), with extraordinary operational leverage coming from the management of assets (ie: predominately active fees for a passive outcome). Nevertheless, their investment into quality digital wealth platforms (groan… robo advice) is significant, and will soon replace their current offerings of free-manual-advice. How soon? You only need to look at what is occurring over the Tasman to understand that this spend is a priority for the top 4 financial institutions.

That is not to say that financial institutions will decimate the financial dispensing industry through technology – far from it. They will however increasingly target consumers direct (as will all manufacturing entities who employ in-house distribution) by offering a low cost, reasonable quality gateways into their capabilities…. “any colour you like as long as it’s ours”. This should appeal more to the masses, as more affluent consumers will prefer to pay for bespoke advice.

…the trick for advisors is to stay away from providing homogenous low value services that are / can easily be replicated on mass…
On 6 September 2017 at 12:48 pm Charity said:
Good advice is expensive. Bad advice is really expensive.

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Lender Flt 1yr 2yr 3yr
ANZ 5.79 4.95 5.15 5.49
ANZ Special - 4.45 4.65 4.99
ASB Bank 5.80 4.75 4.99 5.29
ASB Bank Special - 4.39 4.69 4.99
BNZ - Mortgage One 6.50 - - -
BNZ - Rapid Repay 5.95 - - -
BNZ - Special - 4.59 4.69 4.99
BNZ - Std, FlyBuys 5.90 4.99 5.29 5.59
BNZ - TotalMoney 5.90 - - -
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Credit Union Baywide 6.15 5.45 5.50 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 5.00 5.20 -
Housing NZ Corp 5.79 4.75 4.99 5.29
HSBC Premier 5.79 4.19 4.29 4.89
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
Lender Flt 1yr 2yr 3yr
ICBC 5.80 4.59 4.69 5.09
Kiwibank 5.80 4.95 5.15 5.49
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - ▼4.45 4.65 4.99
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 5.10 5.45 -
Resimac 5.30 4.86 4.94 5.30
RESIMAC Special 5.00 - 4.75 -
SBS Bank 5.89 4.99 5.19 5.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 4.59 4.69 4.99
Sovereign 5.90 4.75 4.99 5.29
Sovereign Special - 4.39 4.69 4.99
The Co-operative Bank - Owner Occ 5.75 4.55 4.69 4.99
The Co-operative Bank - Standard 5.75 5.05 5.19 5.49
TSB Bank 5.80 4.80 5.15 5.45
TSB Special - 4.55 4.69 4.79
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.99 5.19 5.44
Westpac - Offset 5.95 - - -
Westpac Special - 4.59 4.69 4.94
Median 5.82 4.75 4.99 5.29

Last updated: 24 November 2017 8:29am

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