Savings provider in email stoush

Photo / Kenny Rodger

A KiwiSaver provider has come under fire after one of its commissioned salespeople sent out an email with promotional material claiming opposition providers ANZ and ASB were "losing" people's money.

The Business Herald was forwarded the email promoting Fidelity Life's KiwiSaver scheme after a salesperson of Mr & Mrs KiwiSaver sent the documents to more than 30 people encouraging them to contact him to sign up to the scheme.

The email claims Fidelity's KiwiSaver funds are "rated number one across the board" with the best performance of all providers across its conservative, balanced, growth and aggressive funds and includes an attachment comparing investment returns with those of Huljich Wealth Management, ANZ Bank and ASB Bank. Under the figures for ANZ and ASB it states: "They are losing your money."

A spokeswoman for the Securities Commission said it was not illegal for providers to talk up their investment products or compare their performance to others as long as the promotion was not misleading, deceptive or confusing. She said it was up to consumers to check whether any comparisons were correct.

"The consumer needs to do their homework and seek independent advice if they don't understand it."

But if the provider was publishing incorrect performance figures for another company that company could complain to the Securities Commission as it could potentially be misleading.

ASB head of wholesale distribution Greg McAllister said he had serious concerns about the advertising after seeing the material.

"I am gravely concerned about the quality of this advertising material and believe it to be grossly misleading for consumers. I would believe the regulator along with others mentioned in this document might have a similar view."

ANZ was not able to comment in time for deadline. But David Boyle, head of distribution for ING which runs ANZ's investment funds, said the material was disappointing and he had raised the issue with Fidelity.

"We would expect Fidelity to take a hard line on its advisers as we would in the same situation."

Fidelity Life chief executive Milton Jennings said he believed he had stamped out the problem quickly after being made aware of it.

He said the document was designed only as an internal memo to motivate the advisers at Mr & Mrs KiwiSaver.

"At no stage was any adviser allowed to use it as a public document."

Jennings said the salesman had gone outside his authority by sending it out to members of the public and would be strongly spoken to.

Jennings said all future memos by Mr & Mrs KiwiSaver would need to be signed off by Fidelity before going to their salespeople or the public.

A Morningstar report released last week found Fidelity's conservative fund was 10th out of 14 funds, its balanced fund was third out of 20, its growth fund was second out of 17 and its aggressive fund was third out of nine over the two years to September 30.