The banking industry's lobby group has slammed the investment regulator over its guidance on how KiwiSaver should be sold, saying it will be harder for consumers to get information on the retirement savings scheme.
But the Financial Markets Authority (FMA), which released the guidance on Monday, says itwon't limit access to information but may stop people from giving personalised advice when they shouldn't be.
The guidance was released after industry concern about grey areas around giving KiwiSaver advice. The big banks have become a dominant force in the Kiwi-Saver market, ANZ, ASB and Westpac holding significant market share in the $12 billion industry.
But some are concerned the in-roads have been made with aggressive sales tactics.
New Zealand Bankers Association chief executive Kirk Hope said it wasn't objecting to the guidance because it did not suit the banks. "We object because we believe they've gone beyond their powers."
Hope said the guidance appeared to have rewritten the legal test for what constituted advice, making it much more difficult to provide basic information without giving advice.
"This is bad for consumers because it limits access to information about KiwiSaver products. By limiting who can provide information ... they make it harder for consumers to make informed decisions."
It could also force the public to pay for specialist advice. He said the Financial Advisers Act 2008 specifically excluded providing information about a product from being considered financial advice, but part of the guidance note seemed to override the law by suggesting that in some circumstances providing information could be advice, he said.
"They've made incorrect assumptions about the law, and Parliament's intentions, and have ignored all submissions on this point."
Sue Brown, head of primary regulatory operations for the FMA, said the guidance note would not limit access to information from those properly able to give it.
"What it might do is stop people from giving personalised advice who shouldn't be." The guidance promoted high standards for selling KiwiSaver and took into account investors' need for access to advice.
Selling KiwiSaver * The Financial Markets Authority states there are very limited circumstances in which a person presenting KiwiSaver information will not provide advice. * Providing factual information may imply a recommendation or opinion depending on the context. * People who provide generic or class advice on KiwiSaver have to be registered. * Those who give personal advice must be an authorised financial adviser. * Distributors must meet the new guidance by March 1.
