Advisers swing KiwiSaver choices, survey finds

Financial planners are highly influential in the choice of KiwiSaver provider for their clients, according a new survey of Professional Advisors Association (PAA) members.

Wednesday, November 21st 2007, 5:07AM

by David Chaplin

The PAA survey, which included responses from just under half of the group's 620 members, found that in almost 80% of cases advice from a financial planner had a major impact on a client's choice of KiwiSaver provider.

Surprisingly, however, the PAA study also discovered that few advisers believed face-to-face contact with a planner would lift KiwiSaver registration levels. Close to 70% of those surveyed said face-to-face contact with an adviser would make little or no difference to the numbers of people joining KiwiSaver.

Nonetheless, in the few months KiwiSaver has been operational, PAA advisers have signed up a high number of people to the scheme with 15% of those surveyed registering more than 100 clients. A further 20% have registered between 50-100 people with KiwiSaver and just over 30% have signed up between 20-49 clients to providers.

Less than 5% admitted to registering under five people for KiwiSaver schemes.

While the rate of KiwiSaver enrolments is predicted to slow-down somewhat by March next year advisers still expected to sign up "significant numbers" to the scheme over the next four months, the survey found.

Almost 90% of PAA advisers said the government incentives were very important or important in encouraging people to sign up for the savings scheme.

While the overwhelming majority of those in the survey said KiwiSaver would be beneficial to New Zealanders only about 50% of advisers saw the scheme as providing a benefit to their businesses.

Roughly 60% of advisers were, however, actively promoting KiwiSaver but for a variety of reasons including to ring-fence clients, provide an added-value service, capture new clients, for long-term financial reward or short-term profit.

"The main motivations for advisers marketing Kiwisaver are to add value and ring fence existing clients," the survey says. "While acknowledging there is little initial financial reward, advisers still believe that the long term financial rewards make the investment worthwhile."

The PAA survey also found that many members of exisiting superannuation schemes are confused about how KiwiSaver affects them while a large number of employers also need further education about the scheme.

The prospect of adding group life options to KiwiSaver also received the thumbs down from PAA advisers with almost three-quarters of those surveyed unsure of or not supportive of the concept.

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