18 Nov 2015

Focus of KiwiSaver companies 'a worry'

11:11 am on 18 November 2015

KiwiSaver companies are more concerned with expanding their business than offering sound financial advice to their customers, the Financial Markets Authority (FMA) says.

Piggy bank

A new Financial Markets Authority report raises questions about KiwiSaver companies Photo: 123RF

Questions over the way KiwiSaver companies are running their businesses have been raised in a new report from the FMA.

More than 2.6 million people now have KiwiSaver accounts, worth a total of almost $30 billion.

But in the new report, the authority said most providers were focused on business expansion, and director of regulation Liam Mason said that was a worry.

"A very large number of firms just weren't able to show us whether they provided advice or just a sales process for Kiwisaver members. The firms at the governance level - the boards and senior management - are really not going to be able to supervise to keep an eye on what's going on at the front line if they're not keeping that sort of information."

Mr Mason said there needed to be a stronger focus on customer interests when selling KiwiSaver products.

The FMA's full report can be found online here.

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