Online KiwiSaver site back again

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An online KiwiSaver fund selection tool has re-launched after more than a year offline, but due to regulatory issues advisers who use the service will have to do so for free for the time being.

Tuesday, December 4th 2012, 8:01AM 2 Comments

However, the website owners are hoping to have the payment situation resolved shortly as they look to attract advisers to a service they say can be useful to advisers trying to incorporate KiwiSaver into their businesses.

KiwiSelect, which features funds from eight KiwiSaver providers, has been back online for a week after being closed last July to give it a makeover to make it compliant with the Financial Advisers Act.

Dave Isaacs, an authorised financial adviser (AFA) with AllFinanz and a director of KiwiSelect, said complying with the regulations had required big changes.

“A lot of the language had to change… we used to be able to make comments such as ‘we do suggest a balanced fund might be more appropriate’.  Every single sentence has been changed to make sure we are not even perceived to be giving personalised advice.

“Historically we had a very simple risk profile tool where it would say something like ‘we recommend a balanced fund for you’ but we can’t do that now because it could be seen as personalised advice.”

Isaacs said the website is a useful tool for both AFAs, for whom personalised KiwiSaver advice is currently “uneconomic” and registered financial advisers (RFAs) who are unable to provide personalised KiwiSaver advice.

He said the process takes 25-30 minutes as opposed to “at least three hours” for AFAs giving personalised advice on KiwiSaver and all the processes that entails. 

However, while KiwiSelect receives a trail commission for every person who signs up to a scheme through the website, the company is still working out how to pay advisers who use the service in a way that doesn’t fall foul of the regulations.

“We’re looking at a referral-type fee for advisers; we’re taking legal advice to make sure everything is compliant,” he said.

Isaacs said of particular relevance was the section in the Financial Market’s Authority’s guidance around “incentivising” KiwiSaver members to switch providers.

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