[Weekly Wrap] KiwiSaver still the buzz

KiwiSaver was again the hot topic this week as even Winston Peters took aim at the fees fund managers charge.

Friday, October 25th 2013, 12:37PM

by Susan Edmunds

He started the week with an address to party faithful, in which he said Government management of KiwiSaver was a "bottom line" for his party if either of the major parties wanted it as a coaltion partner, post-election.

He said fund managers were making hundreds of millions of dollars in fees "and there's worse to come". The backlash was swift and significant.

I thought his proposal was strange because one of the most common criticisms I hear about KiwiSaver - and it's usually from people who don't understand how the scheme works - is that "the Government" will somehow appropriate their money without their consent, somewhere down the line. From this, I'd guess that most people would not be happy with more Government involvement in the scheme.

All of the KiwiSaver providers had to have their periodic disclosure statements on their websites by Monday. A lot of them were slow in loading them and didn't have them up until the end of the day. And a lot were quite hard to find. In several cases, I had to ring to be directed to the right place on the site to find the information.

Whether the average KiwiSaver member will ever look at this information is yet to be seen. It's not straight forward and despite all the information being shown in a standardised way, the mechanics of navigating all the different sites mean it's still not easy to compare. It looks likely that several organisations will develop tools to help people compare schemes and funds more easily. The Commission for Retirement Income and Financial Literacy is already developing one.

I asked last week whether it was possible that there might be opportunities for independent financial advisers, now that default schemes will be required to offer impartial advice and education to their members. It seems that the answer is yes, although quite how is not yet clear. Almost everyone I spoke to for this story thinks banks will be hard pressed to cater for all their members with the number of advisers they have.

In mortgage news, another OCR announcement is approaching and it looks pretty unlikely there will be any move this time. But the debate is about when the first hike might be. ASB doesn't think the LVR restrictions will have made enough of a difference to alter the March prediction.

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