The Financial Markets Authority has told SuperLife, one of New Zealand's biggest specialist superannuation providers, to overhaul its KiwiSaver sales practices.
FMA chief executive Sean Hughes said he was concerned about a number of matters regarding SuperLife's sales practices, potential non-compliance with the law and apparent poor monitoring of the activities of its sales force.
From July 1, FMA will monitor compliance by KiwiSaver providers with their obligations under the Financial Advisers Act.
"We will not hesitate to take enforcement action against KiwiSaver providers who fail to ensure they comply with their legal requirements," Hughes said.
On June 9, the FMA urged investors to be wary of unacceptable sales practices being used by an unregistered KiwiSaver sales representative, Patrick Diack.
Diack's sales approaches included soliciting members of the public outside Work and Income offices, offering them money to join a KiwiSaver scheme and signing them up to scheme membership without providing them with an investment statement.
The FMA was also concerned about the distribution practices of the SuperLife KiwiSaver Scheme represented by Diack.
Particular concerns related to SuperLife's apparent failure to properly train its employees and monitor their compliance with the requirements of laws including the Securities Act and Financial Service Providers, the FMA said.
It said SuperLife failed to ensure that its employees giving advice, such as Diack, were registered on the Financial Service Providers Register. SuperLife also failed to rigorously train and test its employees in relation to the requirements of law and to adequately monitor its employees' performance, the FMA said.
SuperLife is part of Aventine Group, a New Zealand business focused on the provision of strategic advice and services to the consulting, actuarial, employee benefit, remuneration and administration sectors.