Kiwibank's new KiwiSaver scheme will give its customers the chance to get more involved in the way their savings are invested.The state-owned bank is aiming to demystify retirement savings with the launch of its scheme today, which it said would be the mo
Kiwibank’s new KiwiSaver scheme will give its customers the chance to get more involved in the way their savings are invested.
The state-owned bank is aiming to demystify retirement savings with the launch of its scheme today, which it said would be the most transparent on the market in terms of fee disclosure.
Customers can choose whether they take an active role in managing their own investments or let fund managers make some investment decisions for them.
Kiwibank chief executive Sam Knowles said not all customers would want to actively manage their savings but they could chose the acceptable level of risk and investment type that suited them best.
But others would want to design their own portfolio and take a more active role in their investments.
Pricing would be clear, upfront and easy to understand, he said.
Customers would be able to track performance of their funds on-line and make adjustments to suit their retirement needs.
Mr Knowles, who resigned in May after 10 years in the job, said the scheme was a logical expansion of Kiwibank’s services and products.
“We have a customer base of about 700,000 New Zealanders and there has been growing demand for us to have a scheme that helps customers save for their retirement.”
Kiwibank has been considering its options for KiwiSaver since ending its contract with the Mercer KiwiSaver scheme last year when it said its own wealth management division was considering becoming more actively involved in the superannuation and managed funds sector.
Although the launch of its own scheme has been anticipated, there are questions about how it will be sold to customers.
The National Business Review reported last month Kiwibank franchise owners have been warned not to give advice to potential investors to ensure they don’t get caught out under the incoming Financial Advisers Act.
Banks are particularly affected by the new regulation, which applies to those who give financial advice, make investment transactions and those who offer a financial planning service.
KiwiSaver, which the act classifies as a category one product, requires anyone advising on the scheme to be an authorized financial adviser.
Kiwibank, which is 100% owned by New Zealand Post, said it anticipates applying for Qualifying Financial Entity (QFE) status under the act, effectively taking responsibility for financial advice given by its employees while also looking after the training and regulatory requirements.
But its franchise system, which sees the banks privately owned and operated through the PostShop network, means it faces a trickier task than most banks to govern the quality of advice.
It’s likely customer queries about the bank’s KiwiSaver scheme would instead be deferred to specialist Kiwibank wealth advisers across its main centres and head office.
