The FMA released a report last week in which it highlighted the levels of fees paid in New Zealand compared to UK funds.

Head of regulation Liam Mason said the regulator had expected fees to drop as the amount of money invested increased but that had not happened.

He said there would be increasing focus on funds being asked to show they were giving good value for the money they charged.

But Clive Fernandes, director of National Capital, which provides roboadvice on KiwiSaver, said the FMA report should have included access to advice in its calculations.

“Currently, schemes vary significantly in the access they provide to a financial adviser for their members.

“Financial advice in New Zealand is expensive right now, and as per an international study by Vanguard, it can add up to three percentage points or more in net returns. So it is important the FMA considers this and not fall into a trap of naive interventionism resulting in KiwiSaver providers dropping essential services in order to reduce fees.

“Ultimately we need to achieve a balance to ensure that Kiwis end up better off in the long run. The FMA and KiwiSaver providers should be thinking about access to financial advice when reviewing value for money they provide to members for the fees Kiwis pay them.”

Fernandes said he was not defending high fees across the board, and some fees were too high.

But he said advice provision should be an important aspect of any assessment.

The new financial advice regime would require a higher standard from advisers, he said, which should give providers more confidence that those they engaged were delivering a good service.

He said providers had thus far been competing too heavily on fees without taking into account the services being paid for.