Providers bemoan KiwiSaver guidance

The FMA has released its latest KiwiSaver report, which shows that, for the first time, the number of people transferring between schemes was higher than the number of people joining KiwiSaver over the past year. In the year to March 31, 175,000 members transferred to a different scheme provider and 145,000 joined for the first time.

Investment returns of $1.3 billion were down from $3b in 2015. Investment management fees increased 28% as more members switched to active schemes. 

Rob Everett, FMA chief executive, said: “As new membership is slowing, it’s logical that providers will continue to look to transfers to grow the size of their schemes. The FMA will be paying attention to how transfers occur, making clear our expectations to providers and giving clear information to KiwiSaver members about how to prepare for those circumstances and what they should expect from providers.”

But the FMA’s report said there had been feedback that its KiwiSaver sales and advice guidance could get in the way of members receiving the help they needed to make decisions.