That’s the ruling in the Financial Markets Authority’s latest guidance note.

It replaces a 2012 document that had the unintended consequence of reducing the amount of advice being given on the retirement savings scheme.

The FMA’s previous focus on personalised advice only being offered by those eligible by law to give it scared some providers off advice completely.

Liam Mason, the FMA's director of regulation, said, “We have revised and updated our guidance to clarify how the different categories of advice can be applied to ensure customers are getting the help they need. We recognise advisers and providers should be confident they are acting within the rules.”

The FMA is also issuing a consumer guide, telling people to think about whether they were being pressured and what their options were before they moved to a new scheme.

Mason said the FMA would look at the incentives offered by providers, although it would not draw hard lines. Of interest would be the size of the incentive and how they were sold.

The FMA said that incentives could achieve good outcomes when they encouraged them to get the best out of KiwiSaver.

“We may be concerned where there is a combination of a high-value incentive and an effort to influence a customer to make a significant decision,” the FMA said.

“Our concern would centre on whether the value of the incentive was such that the customer was focused on that.”

It was something that submitters were concerned about.

Glynns Financial Services wrote in its submission: “I have had one mortgage client told that she has to implement new life insurance, income protection and transfer her KiwiSaver in order to get a discounted interest rate and cashback.”

Mason said the main goal of the guidance was to help New Zealanders get the information they needed to make good decisions about KiwiSaver.

The guide makes clear the limits of what can be provided within class advice boundaries.

It says that customers can be told to be in KiwiSaver, to choose a contribution rate that is enough to get the member tax credit, to choose the right type of fund and the correct tax rate.

“A rule of thumb is that you have moved from class to personalised advice when you cannot answer a customer’s question without knowing about their personal financial situation or goals.”

In their submissions, ANZ and BNZ both asked for the guidance to be held back until after the financial advice legislation is updated.

The bill currently out for consultation would remove the class and personalised advice designations completely.

Both said, if the guidance note was issued before those changes were enacted, there could be confusion or “change fatigue” for front-line staff.

The FMA acknowledged that the law changes would effect the guidance, which would have to be reviewed. “In the meantime, this guidance recognises there is an opportunity to remove an identified barrier to New Zealanders getting the help they need to make good decisions about KiwiSaver.”

Mason said the new bill would put more responsibility on the individual adviser to make sure the type of advice they were offering was right for the customer.  It would be a more nuanced approach than the class versus advice delineation.