The FMA’s final guidance on KiwiSaver sales and distribution confirms Registered Financial Advisers (RFAs) can sell KiwiSaver in limited circumstances.

However, the FMA has stuck to its controversial view that advice can be implied, despite a number of submitters questioning whether this view was supported by the Financial Advisers Act or by Parliament.

The Bankers’ Association has slammed the guidance, which chief executive Kirk Hope said was bad for consumers because it would limit access to information about KiwiSaver products.

“By limiting who can provide information about KiwiSaver, they make it harder for consumers to make informed decisions. It could also force people to bear the cost of using specialist advisers,” he said.

“They’ve made incorrect assumptions about the law, and Parliament’s intentions, and have ignored all submissions on this point. Their insistence that the Act includes a concept of implied advice is not correct. And they haven’t explained how they came to this view.

“We object because we believe they’ve gone beyond their powers. Not because it doesn’t suit us.”

However, IFA chairman Tony Vidler said the guidance would benefit consumers by reducing confusion, notingthat many consumers are still struggling to understand the different adviser designations.

“I would imagine those who are already or are close to becoming AFAs will probably be very happy with the guidance,” he said.

“Those not very happy will include the RFAs who were trying to sell investment products without being authorised to do so.”

He said there was an element of “resentment” among AFAs towards RFAs trying to operate in the KiwiSaver space, particularly due to the greater liability that comes with being an AFA.

“Generally speaking it would be fair to say there are a majority of the professional advisers who are not happy with the idea less professional people with lesser licensing requirements are allowed to do their job.”

But Murray Weatherston said RFAs do have a considerable liability when advising on KiwiSaver: that they will step over the line and fall foul of the FMA.

“I’m pleased I’m not an RFA figuring out what I can or can’t do and then whether I want to do it or should do it,” he said.

“One way to solve the problem would be to say those people who are registered but not authorised can sell KiwiSaver, but that would make a mockery of the whole system.”

Weatherston also questioned how claims of RFAs stepping over the line into personalised advice would be investigated.

“With a one-on-one conversation unless it’s completely taped the only way the FMA could ever have a clue on it would be to mystery shop it.”