KiwiSaver and advisers don't equal much

You might think that the government would have given a lot of thought to how financial advisers might fit with its proposed KiwiSaver workplace savings scheme.

Tuesday, August 16th 2005, 6:48AM

by Rob Hosking

After all, the one thing causing employers the most jitters about the scheme is that they could end up as de facto financial advisers, and thus find themselves liable.

You might think, that with the steady ‘drip drip drip’ of regulatory changes in the financial area, that ministers and officials would have turned their heads to the issue.

You might think that, especially with the recent Task Force on Financial Intermediaries reporting– there would be quite a bit of work going on establishing just what sort of role financial advisers might play when KiwiSaver gets under way in 2007.

You might think those thoughts, but you would be wrong.

Documents obtained under the Official Information Act by Good Returns show there has been an extraordinarily lack of work down on how financial advisers might work in with KiwiSaver.

Specifically, one paragraph in a pre-Budget Cabinet paper. And all that paragraph stated was that employees entering KiwiSaver will need sufficient time to consider whether or not they should be in the scheme, and “they may need time to obtain financial advice.” And that is it.

There were two other documents – an email and a draft comment on operational issues – withheld from release.

These were withheld “to maintain effective conduct of public affairs through the free and frank expression of options”.

That usually means someone said something a bit rude and they are now embarrassed about it.

Commerce Minister Pete Hodgson has stated, in a speech to the Southland branch of the Financial Planners and Insurance Advisers Association, that financial advisers play a” crucial role” and their assistance is “crucial to the success of New Zealand’s financial markets and to the success of KiwiSaver”.

But as far as actual work being done – so far, there’s nothing.

Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.

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