by Susan Edmunds
The Commission for Financial Capability this week held its annual summit.
A panel was asked for views on how KiwiSaver should be changed, as it goes into its second decade of existence.
Commission investor education group manager David Boyle said the lack of contribution, general low balances, and the conservative investment profile of many investors, were a major problem for the scheme, despite the large number of people who had joined.
Swann said, among other changes, there should be no commission paid on advice for KiwiSaver in future.
It altered recommendations advisers gave, he said, and was not good for the country.
"Advisers should absolutely be able to charge for and be paid for the valuable service and advice they provide to clients – but product commissions, which are paid by manufacturers for the sale of the product and where no initial or ongoing advice is provided by the adviser is not in the best interests of the client," Murray Harris, Milford's head of advice, said.
Milford does not pay commission to advisers for KiwiSaver.
But Liam Mason, head of regulation at the Financial Markets Authority, said financial advice had a key part to play in KiwiSaver.
Members who sought advice and came up with a plan in the years close to retirement had much better rates of achieving their goals, he said.
"If you can get financial advice in the last few years of savings, the outcomes go up dramatically."
He said New Zealand should be asking "quite a lot of people who get to wear the KiwiSaver badge".
Sam Stubbs, founder of Simplicity, which also does not pay commission to advisers, said some providers would experience a shake-up of distribution over the coming years.
"AI is going to decimate traditional distribution channels and advice. It's free and transparent and transparency is not a feature of the financial services industry. That will happen fairly quickly."
AI would draw on publicly available information to provide simple personalised advice within 12 or 18 months, he said.
"We've said we're doing to do it, produce an product-agnostic, open-source platform that's free to everyone. That's the way that advice gets into the hands of people who can't afford to get advice."
Providers who created good products that helped people would do well, he said. But moat-based businesses that relied on distribution channels would face a serious challenge from technology.
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