My provider is not really helping me with my KiwiSaver. I spoke to my friends, they are with different providers but they have the same issue as me - I am not alone. I asked my provider for help in choosing the right fund, but they just sent me a big PDF which I cannot understand being a second language person, especially the finance terms. I am in the scheme chosen by my company as their default scheme. What can I do?
You have identified a problem that has worried both financial advisers and their governing body FMA for some time.
When the Government regulated financial advisers in 2008, they created two classes of advisers - Authorised Financial Advisers or AFAs, who are qualified to give personalised advice on investments (delving into your unique situation and working out what is the best investment strategy for you), and Registered Financial Advisers or RFAs, who are limited to giving what is called 'class advice' on investments (basic information). This may have been well intentioned, but caused a lot of confusion both within the industry and from consumers.
As the number of KiwiSaver members grew, some providers became more aggressive in their marketing and sales staff encouraged members to change providers (often without them realising what they were signing up to).
In October 2012 the FMA issued a 'Guidance Note on the Sale and Distribution of KiwiSaver' which warned that "The provision of factual information may constitute a recommendation and/or opinion and amount to financial advice, depending on the context."