KiwiSaver provider and economist Gareth Morgan has labelled the Securities Commission's guidance note to KiwiSaver providers a "pathetically weak" response to regulating the industry.
But others have welcomed the move to clarify problems which have been plaguing the sector.
The Securities Commission yesterday released a document advising providers and trustees
of its expectations on how the scheme is sold and how investments and performance are disclosed.
The note comes amid a Securities Commission investigation into KiwiSaver provider Huljich Wealth Management for controversial "top-ups" to its scheme after allegations of inflated performance.
Commerce Minister Simon Power has also asked his officials to consider tightening the reporting requirements of KiwiSaver providers and a higher level of trustee oversight.
But yesterday Morgan said the note showed a "lack of spine" in dealing with issues in the finance industry.
"It's all very well for the Securities Commission to huff and puff to KiwiSaver providers about what they should or shouldn't be doing, but that outfit would be more credible if it dealt decisively with errant participants."
Morgan said regulators had already showed their impotency over the misdeeds of finance companies and were now demonstrating the same lack of spine in dealing with issues in the KiwiSaver sector.
"Putting out reminders to everyone ... is a pathetically weak regulatory response."
But Vance Arkinstall, chief executive for industry body Investment Savings and Insurance Association, welcomed the guidance.
"KiwiSaver is the flagship for retirement savings in New Zealand and it is timely for the commission to release guidelines and to spell out requirements around the prohibition of door-to-door sales and investment performance reporting."
Fisher Funds chief executive Carmel Fisher said it was good to have all the rules laid out clearly. "They are obviously trying to reinforce some rules and practices."
The commission said it was timely to put the guidance out now because of the large number of issues around distribution and disclosure which had surfaced.
Commission chairwoman Jane Diplock said it was vital KiwiSaver investors should not be deceived or misled. KiwiSaver membership had sometimes been solicited in an unusual or confusing manner.
"KiwiSaver issuers need to take particular care to ensure the required disclosures and other promotional materials are accurate, clear, unambiguous and that the methods of distribution are legal, fair and transparent."
