The FMA yesterday unveiled its first draft guidance note on an issue that has been causing plenty of discussion in the industry: when does information-only KiwiSaver selling become class advice, and when does that advice become personalised?

And according to Chapman Tripp partner Mike Woodbury, there are some parts of the note that will likely be put under the microscope by industry players.

"I think there are going to be certain concepts in the guidance note that are likely to be scrutinised closely by the industry and might invite debate as to whether there is legislative support for them," he said.

One of these, he said, was the FMA's view that a recommendation or opinion could be given "by implication".

He also pointed to the FMA's view around transferring a KiwiSaver member from one fund in a scheme to another fund in the same scheme.

"It seems debatable at least whether the view that that is financial advice is supported by legislation," he said. 

"If the person is already a KiwiSaver member it may not be correct to say that transferring from one investment product in the scheme to another is advice under the Financial Advisers Act.

"It may be if the FMA wants to achieve that perfectly valid policy aim there may need to be some regulations enacted."

He said the note showed that there could be risks for those providing an information-only service read from a script, because even the slightest deviation could push them over the boundary into advice.

Registered Financial Advisers would also have to be careful when advising on KiwiSaver transfers, he said.

"If you're looking to transfer from scheme A to scheme B and you talk about scheme B and you're saying ‘this looks like a good scheme' in the knowledge the old scheme is part of the client's portfolio... there's going to be a situation where unless you're very careful you're going to be giving personalised advice."