Retirement Commissioner: Collective effort from advisers needed
Advisers may need to find a way to work collectively to help New Zealanders through the Covid-19 disruption, Retirement Commissioner Jane Wrightson says.
Wednesday, May 27th 2020, 6:00AM 
2 Comments
New research from the Commission for Financial Capability shows that in the last two weeks of April, 34% of households were in difficulty and 40% were at risk of getting into hardship. In total, 38% of households had already experienced some loss of income.
She said New Zealanders were less financially resilient than people in some other countries because of their low levels of household savings; a large number of people with jobs in tourism or international education; and the rate of casual work and temporary contracts. Sixty per cent had savings equivalent to less than a month’s income.
Wrightson said, if financial advisers were serious about helping New Zealanders in trouble they should not charge for their services when they assisted during this time, and think about a collective way to pool their knowledge and advice.
“There are different ways of earning money in this business.”
There would be a business opportunity for advisers who had the mana in the community and were a friendly face to help people through difficult times, she said.
“Advisers who become like a trusted friend, I suspect they will do well. The collective thing for the advice sector is probably the most important thing. Given the scale of what we are facing, what they could do collectively would be my challenge.”
The research showed that 7% of KiwiSaver members had switched to a lower risk fund, locking in the market losses of late March. In addition, 22% of renters were considering a hardship withdrawal from their KiwiSaver fund, which Wrightson said could affect their ability to buy a house in future.
Only 5% had sought financial advice and 12% were considering it. The commission said work should be done to increase people’s understanding of the purpose and mechanics of KiwiSaver.
| « FSC: Advisers more important than ever | Mann on a mission to diversify financial advice » |
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Comments from our readers
Several things to learn from that:
- cancel culture and entitlement critics are all outraged at the same time, this example triggered both!
- she was right to stick to her guns, and entitled to do so. But she ended up losing more than she kept.
- effectively thinking she right made her wrong. Don't forget the long game.
- the suppliers were also hurting
- everything is magnified at the moment, good or bad, decisions carry greater weight in this climate.
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Firstly, lets point out the obvious – Financial Advisers are NZ’ers too and many will probably be part of the 38 % of households suffering loss of income. Over the last few years advisers have been constantly hammered with regulatory change and proposed changes and have had to deal with poorly researched government reports that have made many unsubstantiated claims about behavior and remuneration models.
Compliance costs have gone up and will continue to do so and there is been very little support or marketing to the consumer on the value of getting advice.
Now it seems we are to work for free!! I wonder how our colleagues in the legal or accounting fraternity would be open to provide services for free to help redundant NZers and small businesses to get through the economic turmoil.
So, if we are to work for free then how do we pay for lease costs, staff wages, FMA compliance costs etc.
Yes it would be great to help fellow Kiwis in a difficult position but anytime we appear to give advice, guidance or opinion we are obligated by law to disclose, document, justify and report not to mention incur the liability of claims against us if our advice is perceived to be incorrect.
Maybe Comrade Jacinda and her government could divert some of there billion dollar package towards the financial advice industry so we can provide free advice rather than just dishing it out and encouraging New Zealanders to go and spend (not save) to get the country going again.