This year we have felt the tremors indicating that KiwiSaver's sleeping giant - its membership - is awakening. We felt them in the level of public interest about understanding the actual dollar impact of fees. We felt them in the unprecedented level of interest from KiwiSaver members - and the action taken by providers - in response to the political and media focus on ethical aspects of what's inside KiwiSaver funds.
This is important because, up to now, funds and membership have continued to grow. While providers have benefited from the successful promotion of KiwiSaver, the investing public has been largely disengaged from who is investing their money, and how.
It's clear that's changing. New Zealanders' appetite for investment information, and investment support, has grown. It's too early to say we are at a tipping point, where desire for knowledge translates into behavioural change and widespread action based on informed choice. But it feels close.
Whatever prompts New Zealanders to take an interest in their investments is a strong positive.
Encouraging and empowering investors to make better decisions and engage with their KiwiSaver is one of the goals of the FMA's investor capability strategy.
But we recognise that good investor decision-making is a joint responsibility, requiring effort from providers and investors.
It's a privilege for providers to be entrusted with and look after someone else's money. It is also entirely sensible for someone to take a keen interest in how their hard-earned savings are being invested.
With the FMA's new regulatory oversight of conduct obligations under the Financial Markets Conduct Act, we will monitor and supervise KiwiSaver providers by the outcomes they deliver to their customers, the way they treat customers and the way they communicate. This focus has heightened with the new licensing requirements for all Managed Investment Scheme managers (including KiwiSaver providers), introduced this year and effective from December 1st.
We have published various consumer surveys to assess and promote awareness around particular issues within KiwiSaver and this year we focused on KiwiSaver members' annual statements. We found a strong appetite for better information about their retirement savings. That information is being revamped to help them make better decisions today, about what they are likely to get out of their KiwiSaver scheme tomorrow. Work is under way to ensure providers include an estimated amount of what you are potentially going to have in your KiwiSaver when you reach retirement, what that lump sum figure will convert to in regular retirement income, and the dollar amount you are paying in fees.
This new information will not only increase transparency around the costs of managing your money, it will also enable investors to connect clearly with what they are saving and investing for, and help nudge them to consider the options to make a difference to their final outcome in KiwiSaver.
Other research has also confirmed the commonsense rule that the earlier you make plans and decisions around your financial arrangements, then the better your future financial wellbeing. Do it early and you have more options and more time to sort things out - and to react to unexpected events - than if you leave it too late.
The surveys show us that many people regret they didn't act earlier to sort out their retirement planning.
... providers are not focusing hard on default members. Perhaps they are too busy trying to lure people from other schemes.
There's no question that this stuff is hard and intimidating. Providers have an unfair advantage in holding better information about the products they sell, their risks and their performance, than their customers do. That imbalance of information is a barrier to investor decision-making.
The FMA KiwiSaver annual report this year, for the first time, included reporting on the efforts of default providers to encourage their default members to make an active decision about their fund choice. The results of our reporting demonstrate that providers are not focusing that hard on their default members. Perhaps they are too busy trying to lure people from other schemes.
While we are seeing the giant of KiwiSaver customer awareness start to stir, among default members there is still a majority who remain slumbering in the conservative fund they were automatically enrolled into when they joined, and may not be contributing at all.
Simply joining KiwiSaver is one of the most important decisions you can make to help your retirement savings, but after that moment, we need to help develop savings and investing behaviour - based on inquisitiveness and engagement.
Our focus on customer outcomes and the conduct of providers is aimed at ensuring providers up their game in engaging with and supporting their customers to make well-informed decisions. There is a huge difference in the responsibility that financial services providers have to their customers compared to big brands that sell fridges and phones - financial services and KiwiSaver providers hold the keys to your future wellbeing. That is a responsibility we want providers to remember every time they connect with their customers and every time they take their money.