The Financial Services Council (FSC) has recommended New Zealanders lift their savings to 10% of their income, a move IFA president Nigel Tate said they supported.

“But we think it misses one important factor - getting good advice,” he said.

“Savings on its own isn’t enough. The real risk is that savers don’t invest their money wisely - or draw down at the right level in retirement. That’s where many will really benefit from good advice.”

Tate said evidence going back over decades points to the fact that the most important factor in retirement savings is where people put their money.

“The right mix of cash, shares and so on is vital. Too conservative, and inflation will nibble away. Too assertive, and it might be too volatile for some.”

Tate said few savers have the knowledge to make the right investment decisions and that was why the role of a qualified adviser was so important.

“Also, how’s the average person going to know how much to save? Whether or not to retire earlier, or later? As the report says, people will be living a lot longer - will their money last? If they don’t end up making the right choices, they could wind up living on little more than the state pension.”

He also said retirement saving is just part of the picture and that insurance - and insurance advice - has a role to play too.

“But insurance, even more than savings, is not a one-size-fits-all,” he said.

“Everyone is different, and every product is different. Having insurance in KiwiSaver Plus wouldn’t necessarily meet someone’s needs during their entire life. There could be some potentially big risks that simply aren’t covered at all, or to the right level.”