There are six default providers and a further five schemes have been approved by the Government Actuary so far.

Grosvenor’s Andrew Lendnal says the Government Actuary’s general approach on advice has been “they are happy to have some minimal fees but it doesn’t amount to much.

“The default providers are probably in the worst situation – they’ll need to subsidise that default offering, which they’re not making too much money out of anyway.

“A lot of discussions advisers have had with the providers and insurance companies has been about getting them to charge a fee of some sort - a set up fee or fee for advice.

“But the Government Actuary has a ‘reasonable fee’ test and they look at the overall expense of the scheme. They have a capped range of what they want and it’s substantially lower than a superannuation scheme out there in the marketplace.”

ING’s Steven Giannoulis says the stance on advice does not fit with some of the long-term aims of KiwiSaver.

“We are asking people to make some long term decisions and make long term investments and do it without advice.”

ING – one of the default providers – has its default product, which will not have advice, but has included advice for its non-default product, ING SIL.

“Part of the management fee will be put into renumerating advisers. That is comparative with how we sell other products.”

The Government Actuary has approved this “and hasn’t raised any concerns around that. The fee is competitive with other offerings that include advice.