Advisers vital for KiwiSaver: Beattie

Many KiwiSaver members do not feel they have enough money in their accounts to make seeking advice worthwhile, even if the service is free, one provider says.

Friday, December 18th 2015, 6:00AM

by Susan Edmunds

Grosvenor is a new default provider of the saving scheme.

As part of its service to clients, it offers them access to an adviser.

Each new member who defaults in is contacted and asked if they would like personalised KiwiSaver advice.

Chief investment officer David Beattie said, so far, only about a quarter were willing.

“They say no, they don’t need one, they think they don’t have the money or they are embarrassed to rock up to a financial adviser with $1000 and not much else. They appreciate the offer but they don’t see the value in it.”

But he said Grosvenor did not encounter any resistance to the concept of advice at some stage.

Most KiwiSaver members would need to get to a balance of about $20,000 to start to see the need for it, he said.

Grosvenor has agreements with about 400 financial advisers around the country. About 150 have a strong relationship with the firm.

Beattie said advisers were a big part of the Grosvenor business model.

As he worked with advisers over the years he had seen the value they provided and could see that most people would need advice at some time in their lives.

“We are happy to have them embedded in the business model."

Advisers who deal with Grosvenor KiwiSaver members receive 0.5% commission per year.

Beattie said that made it a good deal for members, who could get advice whenever they needed it. "It's a very small price to have someone there to hold your hand when it all goes pear-shaped.”

He said when KiwiSaver was first launched the regulator had viewed it as a product that could be easily bought and sold.

But there was a much higher level of advice needed, particularly when there was a downturn in the market.

“You’ve got to stop people selling low and buying high. There are a huge number of people enrolled in KiwiSaver without access to advice and left to their own devices, doing it without knowledge. It could be a real issue at some stage when the next big market downturn happens.”

Tags: Grosvenor Financial Services KiwiSaver