25 June 2012
The Financial Markets Authority is consulting on draft guidance for people involved with the sale and distribution of KiwiSaver schemes.
Head of Primary Regulatory Operations Sue Brown said the guidance explains the approach FMA proposes to take when looking at KiwiSaver sales practices.
"We recognise that an important objective of KiwiSaver is to make it easy for New Zealanders to save for their future," Ms Brown said. "In developing our guidance, we have considered the need for potential investors to have access to information about KiwiSaver schemes, and to advice which is provided with skill, care and diligence."
The draft guidance explains how FMA will distinguish between transactions in which only information is given to investors, and those which involve investment advice. FMA will take into account which of these a customer might reasonably think they have been offered.
The guidance explains who can offer these services. A person giving only information doesn't need to be registered for financial adviser services, so they may not be covered by a dispute resolution scheme or be accountable for the information provided. Where advice or opinion is offered, the guidance explains how FMA will distinguish between class advice and personalised advice.
Class advice is generic to a group to which the investor belongs, but is not tailored to their particular circumstances. An entity or sole trader providing class advice must be registered for financial adviser services.
Personalised advice goes further and takes into account an investor's individual financial situation. Only Authorised Financial Advisers or advisers employed by a Qualifying Financial Entity can give personalised advice about KiwiSaver schemes.
"FMA has identified KiwiSaver as a core foundation of New Zealand's capital markets and it is the subject of considerable focus in the work we do," Sue Brown said.
FMA welcomes comments from interested parties before the guidance is finalised.
Submissions on the draft guidance are due by 16 July.
The draft guidance can be found here.
Tony Reid on 021 739 052 or email@example.com