You can buy life insurance at the Warehouse, so why not a KiwiSaver scheme outside Kmart?

Well you can, if you want to, where I live anyway.

But the guy hanging around the Kmart foyer flogging Fisher funds might be a little wary after reading this latest proclamation from the Financial Markets Authority (FMA).

In its consultation document the FMA attempts to draw some hard lines through the fuzzy sales zone occupied by KiwiSaver. Under the 2008 Financial Advisers Act, KiwiSaver was defined as a 'Category 1' product, only to be handled by 'Authorised Financial Advisers' (AFA), but the law left a few gaps for the unauthorised to sneak through.


For example, you could get away with claiming your chat outside Kmart was an information-only, brochure-delivering experience, no advice intended.

The regulator has clearly been inundated with queries, both from the sold-to and sellers seeking clarity on who can say what to whom about KiwiSaver.

And the FMA proposals provide very detailed information, including a few role-plays, on this subject. Although some fuzzy bits remain, the regulator offers little relief for the 'no advice' sales force.

"However, although a salesperson may seek to rely on a 'no advice' exception, the provision of factual information may amount to financial advice depending on the context," the document says. "Where a person is presenting a particular KiwiSaver scheme to a client in a face to face or telephone context, we consider that in most cases the conversation with a client is likely to go beyond the exception and become an advice service. Recommendations or opinions to buy the product, which may be express or implied by the context, will be given."

The FMA lists a few examples of unacceptable activities it has encountered, such as (the already illegal) door-to-door KiwiSaver sales techniques and "sales approaches from suppliers of other household services".

As well, the FMA has seen evidence of people bundling up "KiwiSaver membership with unrelated household arrangements".

"In some cases investors were unaware that they were committing to KiwiSaver membership, rather than purchasing household products," the FMA document says.

A Kmart KiwiSaver may not be far away.

Can I get price-check on advice please?