Sue Brown, the FMA head of primary regulatory operations, acknowledged there had been concern within the financial services industry about the extent to which KiwiSaver services could be provided by advisers who were not authorised or part of a Qualifying Financial Entity (QFE).

“FMA’s position is that there are limited circumstances in which a person selling a particular KiwiSaver scheme to a client will not be considered to have provided an advice service,” she said.

“There is broader scope to provide class advice, given the incentives available to join KiwiSaver and the investment options available within KiwiSaver schemes.”

The FMA guidance note outlines what it deems class advice, personalised advice and no-advice, and who can offer each.

The guidance described class advice as generic to a group the investor belongs to, though not tailored to their specific circumstances, and says it may be provided by RFAs.

The move to allow RFAs to give limited KiwiSaver advice had been backed by both the Institute of Financial Advisers (IFA) and the Professional Advisers Association (PAA), both of which made submissions to the FMA on the draft guidance note.

“Perhaps the best outcome is that the document makes it clear that RFAs can sell KiwiSaver in tightly controlled circumstances, by setting the framework for RFAs in particular to continue to sell KiwiSaver with confidence,” said the IFA.

Brown said she expected KiwiSaver providers “to consider the implications of this guidance note and make appropriate changes as soon as possible.”

“We expect these to be in place by March 1, 2013.”