FMA KiwiSaver draft guidance “positive but not perfect”

2 July 2012

FMA KiwiSaver draft guidance “positive but not perfect”- IFA

The Institute of Financial Advisers (IFA) has cautiously welcomed the Financial Market Authority’s latest guidance note on KiwiSaver selling.

IFA President Nigel Tate says, “There’s a lot they’ve got right. It makes it clear that Registered Financial Advisers might be able to distribute KiwiSaver in very tightly controlled circumstances if only giving class advice – but that is difficult to achieve. Advisers have faced uncertainty on this particular area for some time and now they have some clear guidance.”

The IFA says the FMA has done well to provide clarity on the difference between class and personalised advice as well as the criteria they would expect an adviser to take into account when providing this service.

However, the IFA is wary about a couple of areas. “We think the issue of remuneration is a red herring because on its own it can’t turn class advice into personalised advice,” says Tate. “We also are wary about the extent to which advisers will be required to advise on risk profiling. If they’ve got to do that then, in practice, how can an RFA sell KiwiSaver?”

The IFA will be submitting a response on behalf of its members during the consultation period but is also encouraging its members to consider the proposed changes and put in their own submissions.

IFA Vision
To be recognised as the professional body for financial advice in New Zealand.

IFA Mission
To help our members reach their full potential to deliver professional, quality financial advice to New Zealanders.

IFA Background
The Institute of Financial Advisers is the professional body for some 1,000 members, representing financial advisers in New Zealand. All members are individual members, not corporate members. We estimate that our members provide advice to some 200,000 New Zealanders each year, many of whom would be couples rather than individuals, with an overall client base of around 600,000.

Our members provide advice to their clients in the areas of insurance, investments, financial planning, work-based savings and insurance, retirement planning, estate planning and financial services generally. Their professional practices reflect the broad spectrum of New Zealand businesses – they operate as local SME’s, are part of large regional or national dealer groups, are associated with strong financial organisations, services companies in banking, funds management, or insurance, work in employee benefits organisations, or sometimes practice as lawyers, accountants and other professional advisers.

The Institute reinforces compliance with a code of ethics and practice standards, runs a Professional Conduct Committee and Disciplinary Tribunal that are independently chaired, offers education pathways that can lead to professional designations and the attainment of internationally recognised adviser marks, maintains and ensures compliance with a continuing professional development programme, and provides networking, education, development, and business practice forums at a national and regional level for members.

ENDS

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