Advisers helping clients do better: AMP

Some KiwiSaver members could get a nasty surprise when they receive an update from their provider telling them what sort of income their savings could generate in retirement, one provider says.

Thursday, April 23rd 2020, 10:12PM

As of this year, annual KiwiSaver statements must include retirement savings lump sum and income projections.

Blair Vernon, chief executive of AMP Wealth Management, said a recent survey conducted by his organisation found that 75% had no idea what their KiwiSaver balance would be when they retired. More than a third did not know what income they would need to support the lifestyle they wanted.

The majority of AMP members would get a projected income of less than $100 a week from their KiwiSaver accounts, he said, even though their members were higher than the industry average.

There was a risk some people might think that made it not worth engaging with their savings, he said.

Providers would have to help them see that the money put aside so far was meaningful and help them stay the course, he said. “For a lot of people they’re in their 20s or 30s and have 30 or 40 years until retirement. How do you move forward?”

It would be hard for advisers to have conversations beyond immediate financial concerns with some clients, he said, but there was also an opportunity while some people were off work to take the time to budget and plan.

“People who have taken the opportunity to work with an adviser have a more optimistic view … having a coach helps and an adviser takes that role.

“Advisers know how to talk through volatile moments. The critical work of an adviser in these moments is to help people not make rash decisions, not crystallise the downside. That’s coming through in our client base.”

He said the level of calls to the AMP call centres from people worried about their KiwiSaver balances because of market volatility had dropped.

But he said there was an increase in inquiries about hardship withdrawal criteria, although that had not translated into large numbers of applications yet.

There would be work to be done to help people work out whether they could afford to continue their contributions if they lost income, he said.

The challenge would be to help people think beyond the immediate problems they were encountering and through to the future, including retirement.

Tags: AMP Blair Vernon KiwiSaver