Financial Markets Authority
NZBA appreciates this opportunity to submit on the draft guidance note. We believe in the importance of the KiwiSaver regime both to the market and to the long term prosperity of New Zealand.
The KiwiSaver initiative sets out to encourage retirement savings for the long term benefit of New Zealanders. Fundamental to achieving this objective is ensuring that KiwiSaver products are easy to access. In addition, the ability to switch between funds was intended to drive competition in the market, resulting in better investment outcomes for KiwiSaver members.
Since the inception of KiwiSaver, banks have played an important part in the sale and distribution of KiwiSaver products. The wide spread of bank networks across New Zealand has enabled easy uptake, and has provided people with an accessible and affordable way to access information and advice regarding KiwiSaver products.
On the whole KiwiSaver products have been well accepted with member numbers inching close to two million. In addition, NZBA understands that complaints and issues around KiwiSaver have been fairly minimal. Anecdotal evidence from the Banking Ombudsman has been that complaint volumes have been very low, with all complaints to date being about the features of KiwiSaver rather than the product itself. This has mirrored the experience of NZBA member banks.
NZBA believes banks will continue to play a major role in the future of the KiwiSaver market, particularly as committed and competent providers of information and class advice services. In order to do this, it is essential that guidance about financial advice in the context of KiwiSaver is clear and allows banks to design and work within an appropriate service model.
NZBA supports the intention of the guidance to bring greater consistency to practices regarding the sale and distribution of KiwiSaver products. We believe that this will help increase confidence in KiwiSaver, which will have positive impacts both for consumers and the industry as a whole.
NZBA further notes that the structure of the guidance, especially the use of examples, is very user friendly. We commend the FMA for designing the guidance in such a user-focused manner.
NZBA does, however, have some concerns about certain aspects of the draft guidance.