RA, AFA, QFE...Gen Y uni student Hannah Lynch tries to get a handle on the new regulations in search of a KiwiSaver provider that makes sense

RA, AFA, QFE...Gen Y uni student Hannah Lynch tries to get a handle on the new regulations in search of a KiwiSaver provider that makes sense

By Hannah Lynch

Generation Y is well known for its technological sophistication.

Digital communication is our birthright and technology dependency remains an integral part of our lives.  

I don't want to be a slave to my job like my Baby Boomer parents are so I decided it was high time to explore my financial options and start thinking about my retirment future even at the age of 21. 

Turning to my iphone I was quick to discover that KiwiSaver did not have its own application and its Facebook profile was almost non existent.  
 
Help! KiwiSaver clearly required a face to face approach. 
 
First stop: Westpac 
 
In hindsight Westpac was probably the most 'user-friendly' of the KiwiSaver schemes I tested.
 
The customer service desk was quick to direct me toward a customer banking consultant to answer my questions. There was no pressure to join the Westpac KiwiSaver Scheme and I was encouraged to make an appointment with one of Westpac's registered financial advisers before signing up.  
 
I took this as a good sign as under the new financial regulations (which took effect July 1) KiwiSaver providers are required to come clean about their qualifications and credentials. So Westpac ticked all the boxes on that front.
 
Whilst clear on procedures, I didn't get much more than that.  It was clear that to get anything worth seriously thinking about, I'd have to see a financial adviser.
 
Second Stop: Superlife 
 
In June Superlife was told to "overhaul" its sales practices following sanctions by the Financial Markets Authority (FMA) against a unregistered financial adviser who was caught selling schemes to WINZ clients for NZ$10.
 
Superlife's "apparent failure to properly train its employees and monitor their compliance with the requirements of laws" (see article by Amanda Morrall) had me curious about its KiwiSaver selling tactics, post FMA warning.
 
A quick Google search and I discovered Superlife does not have any branches so I called its 0800 number for information.    
 
Their efficient receptionist immediately offered to mail me out a KiwiSaver pack which included provider information and membership forms. 
 
I declined and asked if I could speak to someone in person to get some more details about my future retirement fund.
 
She declined to give me any specifics about the scheme but explained in general terms how it worked.
 
When I persisted on trying to get more than a mail-out, I was stonewalled. Sorry Superlife, but I want answers not mail.
 
Third Stop: Mike Pero Mortgages 
 
The staff at Mike Pero Mortgages stressed they were an "information only service" which means they provide potential customers with information about their chosen provider, in this case Fisher Funds Management.  In May, following Fisher Funds buy-out of Huljich's former KiwiSaver business, it partnered up with Mike Pero on an exclusive distribution deal. (See May 12 article announcing the development here).
 
The call center staff were unsure about how the July 1 changes affected their KiwiSaver scheme. They didn't inspire confidence but at least they were honest so it is hard to fault them for that.
 
The first person I spoke with told me KiwiSaver was temporarily on hold at Mike Pero. Then a second person rang back to explain that the suspension was only for a few days as there was some paperwork that needed to be processed to avoid any breach of the new regulations.
 
Hey guys, I feel for you but if you're confused, how do you think I feel?
 
July 1 Changes: 
 
So what changed on July 1?
 
 
Under the new regulations staff are required to state whether they are an authorised financial adviser (AFA), registered financial adviser (RFA) or a qualifying financial entity (QFE). Additionally, they all must be registered on the new Financial Services Provider Registry where members of the public can check up on their adviser.
 
Any starting point for a conversation on KiwiSaver should start with this fundamental explaination of credentials and qualifications. (See classifications below).
 
None of the providers I spoke with informed me of their advisory status. A big no, no under the regulatory changes as I understand.
 
An empty shopping bag: 
 
With Gen Y kids like myself slowly joining the workforce, it is a shame to have walked away empty handed. 
 
Essentially, I was left to do my own research on which KiwiSaver scheme was right for me and that is a daunting task for a generation still struggling with the concept of "saving".  
 
I love to shop but until the iphone application is developed I think I'll put the KiwiSaver shop on hold. 
 
For Gen X and Baby Boomers wishing to brush up on their KiwiSaver schemes, more information can be found the "old fashioned way" on the internet. Here's a few links to get you started.
 
 
For an independent money guide see sorted.org
 
 
Also, for more information on how KiwiSaver works check out the financial markets authority
 
Types of Advisers: 

Registered Financial Advisers: 

Can advise on simpler products like insurance, bank term deposits, and mortgages.

RFAs can give you information about investment products such as KiwiSaver but they can't provide advice. So they could, for example, give you a brochure about KiwiSaver. But they are not qualified or allowed to answer questions you may have about whether a particular option is suitable for your situation as that would be advice.

Qualified Financial Entity Advisers: 

Can advise you on the same products as RFAs and investment products like KiwiSaver or managed funds. But they can only advise you on the products provided by their company.

Authorised Financial Advisers: 

Have met minimum qualification requirements and professional standards. They can advise on more complex investment products and can also offer investment management and investment planning services. Their licence will set out the types of products and services they are authorised to offer.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

32 Comments

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Perhaps you should unplug the i-pod and go learn some things the dumbed down education system dosn't teach you ie: "monatery debasement" and  "purchasing power"

Two things that Kiwi Ponzi dosn't account for in most consumers consuming plan!

Secret Cult?

The few who control the many by way of money supply are a from of secret cult !

Never posted stupid posted "Dumbed Down"  Its not there fault the system is loaded in a way that dumbs you down, dumbed down populations are easy to control. Look at NZ most argue about left and right yet its obvious both are one in the same, look at where our voted chimp politicians all end up world bank IMF UN WTO WHO or 10 directorships at any of the Trans Nat corporations....vested interests I would say!

The last thing those in the shadows want is a well informed population of critical thinking individuals sitting around a kitchen table talking about the true nature of things.

Kiwi Saver Cue Bono?

Well for starters those with the ability to create money from nothing on your signature!

 

All good!

Martyb in regards civilisations that my fellow poster is one interesting topic but if you really believe Eygptians built the pyramids in the whitewashed history you have been told about then you will not find one...

Alternative history ie: there was more happening before 10,000bc than the majority are lead to believe offers some very interesting possibilities indeed, but most have closed minds and Im not here to change your mind only the individual can do that for them selves.... 

I begin at red ice creations and listen....

Again the individual must decide what resonates as a truth or not. Theres colums on the right of the site to other individuals who never get the time of day in mainstream media.

much in the alternative comunity is DISINFO so again its all about digging deeper yourself to find your own truths its not about what some else thinks and tells you....there truth or con may not be yours....

Theres enough pshyco's already telling us what to do and whats required in this life!

http://www.redicecreations.com/ 

Your mind works best like a parachute open!

 

Critical Thinking....

What Pharaoh has been discovered in what pyramid?

Did you know theres a pyramid as big as Giza pyramid in Bosnia?

How did that get there?

I wouldnt call a giant pyramid in Bosnia a lack of proof and I wouldnt say all the documented public domain information on the federal reserve, banking in general, and things like operation paper clip 1945 a lack of proof either...

Also actions speak louder than words tell me wheres the last illustrious leader of NZ at now? Who replaced her and where did he come from? Musical chairs mate and thats all documented in the public domain!

How about Max Bradford? What about that Upton guy remember these characters ?

The proof is all around you!

Really not acording Zahi Hawass  lol aye thats why its on mainstream tv eh?

lol

Hannah, you hadn't yet got to the point where the provider gives you financial advice e.g. when you sit down with the Westpac person, in the above example.   At that point, they would let you know what kind of Adviser they were.

Can you imagine 0800 line operators having to explain QFEs, RFAs and AFAs, Category 1 & 2 products just because someone has said the word "KiwiSaver"?    It's better to talk to people first, find out what they are after, and if it sounds like they need financial advice, tee them up with an AFA.   A good AFA will explain everything face-to-face and on the documentation that needs to be handed over at the first opportunity.

You are correct, it is now complicated.

It sounds like you require personalised information. Under the new laws you can get this from an adviser at  QFE (usually a large organisation like a bank) they are restricted in the product they can provide information on.

You can also get information from an AFA (Authorised Financial Adviser) some of these work at the QFEs above. There are about 1600 AFA's in NZ, but many do not give Kiwisaver advice. The best way is probably to look on the FMA website and call several in your area.

It is my understanding that, unless you make it clear in writing  that you do not want them to, an AFA is required to gather personal information about you and supply a written report. This all takes time and money, but the AFA is not allowed to direct or influence you to not buy a report. They should tell you how much extra this would all cost and what the benefits are.

Once the AFA has covered their backside, they should be able to provide you with the advice that you need.

If this all sounds to hard ask a member of parliment, they are exempt from the above as part of their duties.

Stick at it. In my opinion Kiwisaver still has merits for most people.

I think the whole idea of Kiwisaver is that yes, you are required to research yourself which is right for you. Everyone has a different situation and different values when it comes to money. I'm a conservative young gen x'er. So I'm in it for the long haul.

By joining a Kiwisaver scheme you have to be clear its what you want, you are signed up till you reach (currently) 65. I talk to my young (18-21) staff about Kiwisaver quite a bit. I always stress for them to do their homework on the providers they are interested in, find out what the fees are, and how easily they can deduct more fees if they see fit, what kind of after tax returns they have shown and so forth.

I researched off and on for a year before I settled on a provider and signed up.

Theres a little compound interest Kiwisaver calculator on the Sorted website. If you have 45 years till retirement, just take a look at that very large number it spits out. How can saving be daunting when you can have mammoth results because you started saving at 20 instead of 30?

Yea 45 years big impressive number BIG DEAL its meaningless! I know Ive achevied it and guess what it isnt enough....

The big impressive number isnt that big and impressive 45 years later when you factor in monatery debasement and purchasing power!

Please do explain to the rest of us how you are able to purchase more goods and services with dollar of today as compared with the dollar from 20 years ago?

That big impressive number would need to triple under current paradigm of central bank printing and low interest rates...to give any BIG NUMBER clout in the real world!

The results on the sorted website are given in today's dollars as well as nominal dollars precisely so as to allow for changes in dollar values and purchasing power.

 

Nice.

Does it project forward 45 years?

 

You know, you could always try looking at it for yourself.

The interest at the moment does not keep ahead of inflation! Period! I have that problem right now based on the numbers bandied around 20 years ago!

There is no international competion its an illusion. Who owns most of the productive stuff? 

The only bit of capitalism we as minions practice is the risk bit. usually in the form of a tax its for your benefit that Goldman Sacks etc el are bailed out with your blood sweat and tears whilst those at the top injoy larger bonus,

Comm-on people get real!

 

you forgot the tax...

Ownership in private hands? lol

Stop paying your rates or morgage(debt till death - french origin) etc etc and see who really owns your house!

The Crown yep, the corporation who own you! At will can demolish your house if its in the way of there projects!

LOL go check out what the City of London is about! A private for profit corporation.

lol when you swear allegiance to the Crown it aint the queen martyb!

Buy hey i agree private home ownership is a good thing along with saving capital and reasonably workable after all the current illusion is built on that premise...or fact or what ever label you care to use... 

 

 

Like I said you buy into what you think you know which is from about 10,000bc forwards so your stuck in that mindset.

Tax is political eh? Indeed it is!

The fascist state one party is the merger of corporate, banking and political entities.

lol...welcome my son welcome to the machine its alright we told what to dream... 

You ask many questions but can not answer which pharoah has been discovered in a pyramid? 

 

You did ask and i did caution ya! its a interesting topic! remember that?

My sources are every where red ice is but one portal the library is another...I have no one fixed source or guru that I follow...

No prob later....

Sepherical. You seem like quite a depressed individual. Smile, you live in New Zealand. You are already one of the elites compared to billions of people on this planet.

You dont know me so think what you like Calvin. 

Most of us in the western world have more power at our finger tips with a light switch than any ancient king and queen so I already know the fact about living in NZ as opposed to living in some dump around say the black sea thats been pilaged for its resources, or some crony country in Africa.

But depressed you are mistaken I only present an alternative view thats niether left or right take it or leave it - unfortunatly i always end up putting up with the dead beats the rest of you keep voting for - for a unknown reason that i have yet to figure out...

Take this thread I heard all this crap back in 1992 and whats the best we have come up with?

lol too funny!

Have a happy day!

 

Well said spherical. Nz has become a political joke to all but the most simple of mind or lacking in basic questioning skills. There are complex reasons for this which you will be aware of given your entries here. The real question must be , should someone stand up to challenge the current joke that is Nz government of the past 40 years , what reaction will be the masses have.
I suspect I know , but I look forward to finding out.
Most will not react until it hits them in the face which is really too late.
Oh and to Hannah , read much deeper to see if your hard saved funds will be available to you in 45 years because if anyone says they will , then they are lying or more likely do not know or cant tell you the history Pension funds have been nothing more than a ready made pot to be pillaged. This will not change , and no Colin I'm not depressed , just realistic & frustrated that people put up with the same garbage over & over like it makes a difference. Change will come , that's a certainty

Multiple entries

Well said spherical. Nz has become a political joke to all but the most simple of mind or lacking in basic questioning skills. There are complex reasons for this which you will be aware of given your entries here. The real question must be , should someone stand up to challenge the current joke that is Nz government of the past 40 years , what reaction will be the masses have.
I suspect I know , but I look forward to finding out.
Most will not react until it hits them in the face which is really too late.
Oh and to Hannah , read much deeper to see if your hard saved funds will be available to you in 45 years because if anyone says they will , then they are lying or more likely do not know or cant tell you the history Pension funds have been nothing more than a ready made pot to be pillaged. This will not change , and no Colin I'm not depressed , just realistic & frustrated that people put up with the same garbage over & over like it makes a difference. Change will come , that's a certainty

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Well given the pace at which the ratings agencies now seem to have found their voice , I would only say that you should seriously challenge what you believe the markets to be, and if the rot can be stopped or if in fact it will be stopped. Paper v real assets is your question.

"Pension funds have been nothing more than a ready made pot to be pillaged" very true....there are more than enough examples /evidence from post WW2 to show that any pension where it is controlled by the state or centralised is vunerable, whether tahst downright taken off you or political interference and control on where its invested occurs....and right now we are going into a period of high risk of such events IMHO.  The only sane action right now is stop paying into them if you can and if you have debt and clear the debt. If nothing nasty eventuates take out the debt again later...and learn enough to do your own savings/pension...

regards

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The only genuinely productive asset , is land. The rest is actually just a charade. Oh and the person who kept referring to elites , does that mean they should not be challenged , you seem to have been resigned to being dominated perpetually , excuse me if I missed your point.
I am sick of people who seem to not want to see simple systems for the distraction & entrapment that they are. Control of a simple majority is all it ever takes

No, far more things producing a good are productive assets...but yes land is energy....

The problem of controlling a simple majority is there is a real danger they control you....we can see that in how pollies act....

regards

Agree!