Advisers hang back from KiwiSaver

The Financial Markets Authority has released its latest KiwiSaver report. Director of regulation Liam Mason said even small amounts of advice made a difference to investors’ engagement with the scheme, but AFAs were still unlikely to get involved.

He said that was probably because the numbers did not stack up - providers that pay trail only pay between 0.15 per cent and 0.25 per cent of the client's balance, per year.

Adviser Stephen O’Connor said it was hard for advisers to charge KiwiSaver clients an appropriate rate. “It takes time, you are adding value certainly but to turn around and charge for that time is quite difficult – a lot of clients will not be in a position to pay or may not be prepared to pay.”

He said KiwiSaver was often offered as an add-on service to existing clients.