Advisers’ part to play: FMA KiwiSaver fee guidance

Paul Gregory

The FMA’s long-awaited guidance for investment funds calls on fund managers to annually review their fee structure and value for money, and to prove that they have done so to the FMA.

But one of the most notable aspects of the guidance is the removal of the regulator’s hard line attitude to advice fees. The proposal in the draft guidance that stipulated KiwiSaver providers would have to charge members individually for advice fees rather than having the cost spread equally over the entire scheme, has been dropped.

Director of investment management at the FMA, Paul Gregory, told Good Returns that rather than a hard line, the regulator’s approach across all aspects of the guidance was designed to be “a principles based approach because we didn’t see any point in specifying what fees had to be or to tell managers that they couldn’t make a profit from managing people’s money”.

Those principles are listed below.