Adviser calls to ditch default schemes

The Government is working through the process of appointing default providers for the next term.

There are nine default KiwiSaver providers, and their terms of appointment expire on June 30. About 715,000 people are in default funds and more than half have not made the choice to be there.

Being a default scheme is understood to give providers a reputational boost, but it comes with increased scrutiny and regulatory restrictions, particularly on the fees that can be charged.

But Clive Fernandes, an AFA who specialises in digital advice, said the idea of default schemes had passed its use-by date.