@goldcard - how would you propose that a fund manager calculates the TER to include adviser fees given not all clients pay them and different advisers charge different fees, not to mention some advisors charge different fees to different clients? The advice fee gets disclosed in the adviser's disclosure statement and the statement of advice, so the client can add that to the published TER of the fund they are invested in to see how much they are paying overall.

Schedule 4 of the FMCA regs 2014, particularly clauses 2(1) and 53(3) provide the basis for excluding individually charged advice fees from the statutory TER. This was introduced with the best of intentions, but now it is little more than an invisibility cloak for deductions from member accounts.

@Ross The evidence is pretty clear on that. When advisers work in the best interests of their customers, as opposed to putting their customers into the products that pay them the most, outcomes are improved. (Makes sense doesn't it? Financial advisers go from sales people for fund companies to client fiduciaries.) It might reduce access, but does someone with $50K in a KiwiSaver really need investment 'advice'? A risk profile questionnaire or similar is a much better way to help consumers get into the right fund, i.e. move from a Balanced Fund to a Growth Fund. Why have more developed investment markets, e.g. US, UK, Canada, Aus, Netherlands etc. have banned adviser commissions from fund providers? I'd also add that there is a large group of KiwiSaver customers that are paying someone an advice fee without getting anything beyond a cursory email once a year in exchange. As @Paul says, it's 'easy money' for advisers...