Plans for a KiwiSaver only adviser being considered
The Code Committee is considering the idea of having a designation for advisers wanting to give advice around KiwiSaver only.
Friday, July 19th 2013, 6:00AM 
6 Comments
It wouldn’t be another designation like AFA, RFA or QFE, but would be a restricted AFA.
Code committee chairman David Ireland says it is one of a number of ideas which will be raised in a discussion document on the code.
He says the committee can’t establish other designations, but there are already example where advisers can be licensed for specific areas. One example is discretionary investment management (DIMs). There are also AFAs who can only give advice around either mortgages or life insurance.
Ireland says the committee were “loathe to more complicated and granular than it needs to be.”
However it also recognised there was the need to be able to provide advice to KiwiSaver members.
The committee was planning to have the document out around the time that the Financial Markets Conduct Bill was passed into law. However as that has now been pushed back to later in the year the committee will release its paper before the bill is passed.
Ireland says the committee would like to have its consultations and decisions finished by the end of the year as there are some sunset clauses in the current adviser legislation which are due to end then.
He described it as being a “self-imposed deadline”.
The “tweaks” to the code will “not be too dramatic or drastic”.
Advisers are also going to be hit with some discussion documents and guidance notes from the Financial Markets Authority next week. One of these will be guidance on AFAs providing limited financial advice rather than a full comprehensive plan.
This issue is designed to allow AFAs to deal with questions from clients like whether or not they should have bought Mighty River Power shares.
Ireland says the committee haven’t seen this guidance yet.
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Comments from our readers
If RFAs want to work in the KiwiSaver space then either join a QFE entity that does KiwiSaver or make the effort like the rest of us and become an AFA.
Allowing any RFA investment advice undermines all those that did AFA and makes a mockery of the regulators attempting to raise the bar in our industry.
That being the case, why would an RFA want to tie up precious time to worry about KiwiSaver advice.
Many of us RFA's have completed the study required to obtain the qualifications but do not wish the be authorised.
Under insurance in New Zealand is a much larger problem than lack of advice on KiwiSaver. Most RFA's would prefer to put their time and effort into helping solve this problem.
RFAs should be all in, or all out. Simple. If you want to do KiwiSaver or any investment stuff you can get a QFE or AFA designation.
A KS with $10k in it will soon have $100k, and will have it sooner, and keep it longer, with good advice. It is not something which requires less qualification, less record keeping and less oversight in an adviser for, so a dilute AFA status is not the solution.
And Ron, the main reason RFAs want to play with KS is to get it done quickly then move onto that under insurance story - right? Isn't that why many were playing with KS pre-2011? It has never been a money-spinner for advisers, apart from its power as a door-opener. For two years now anyone doing KS has to do it right, or not at all, and that's why RFA apologists will support this proposal, but also why it wont go anywhere.
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The most significant long term risk is for a saver's retirement nest egg to be poorly considered and advised upon from the outset. Despite industry arguments around the cost/benefit of providing KiwiSaver advice, advice should be left to those who have made the efforts to become qualified to provide such advice.