Here is the latest consumer guidance being offered by the Financial Markets Authority (FMA) on KiwiSaver transfer offers.
As advisers, helping clients get the answers to these questions should be a key part of your service.
They do state that if advice is required by the consumer, that Authorised Financial Advisers (AFA) are the ones who can offer personlised advice.
We see a lot of Registered Financial Advisers (RFA) who offer Class Advice services for KiwiSaver.
Common issue we see are;
- They neglect to provide information comparing the existing scheme to the one they are offering.
- They don’t provide the option of getting personlised advice from an AFA.
An RFA who is asked; Which Scheme is better? Should I move? How much should I contribute? Which fund would you recommend? and provides a Class Advice answer, runs the risk that clients assume the advice is personlised, especially if they don’t provide an option to get personlised advice.
How the consumer perceives the advice is important to how the FMA would look at a complaint about the advice or transfer of KiwiSaver.
I know most RFA’s use the product providers disclaimer for class advice, but does that really match what happened in the client’s mind?
If you are not sure where the line is or want to know more about class advice best practice, please feel free to contact us to discuss.