Majority of financial advisers mention just one KiwiSaver option

The majority of financial advisers who can give personalised KiwiSaver advice only mention one scheme, a report by the Financial Markets Authority has found. Photo/Steven McNicol.

More than half of financial advisers who can give personalised KiwiSaver advice only mention one scheme despite more than 20 being available for the public to invest into, a report by the regulator has revealed.

The Financial Markets Authority has released a detailed break-down on who New Zealand's authorised financial advisers are, where they are based, how they are paid and what they give advice on based on annual data collected by it.

It found that of the 1800 authorised advisers two thirds said they offered KiwiSaver advice but only a small number of clients received it.

While most advisers had an average client base of 50 to 100 people most gave KiwiSaver advice to fewer than 10 clients over the year.

Of those that gave advice 51 per cent only talked about one scheme.

A further 37 per cent said they talked about between two and four KiwiSaver schemes.

Just 5 per cent mentioned more than five KiwiSaver schemes.

The FMA's website currently has 28 KiwiSaver schemes registered on it.

FMA director of regulation Liam Mason said its biggest concern was people not getting any advice around KiwiSaver at all.

A report it released last found just three out of 1000 people received advice when joining KiwiSaver or transferring schemes.

But if it saw a continuation of the trend for the majority to give advice on just one scheme it would be asking questions around incentives.

Mason said it would also be concerned about what the public expected versus what they were offered.

"How are those advisers presenting their KiwiSaver service?"

Fred Dodds, chief executive of the Institute of Financial Advisers, said some of the data could be attributed to a large number of authorised advisers being employed by the banks in which case they would only recommend the bank's KiwiSaver scheme.

He estimated around 600 authorised advisers worked for the banks.

Others would have looked at a number of schemes and just selected two or three to simplify people's choices, he said.

Dodds said part of the problem was the lack of money advisers were able to earn through recommending KiwiSaver.

KiwiSaver providers pay around $20 to $50 per new client signed up to their scheme as well as an annual trail commission of around 0.2 to 0.5 per cent of a person's account balance to the adviser.

He said more advice would be given when balances got bigger and people were prepared to pay for it.

The data also showed the industry is shrinking and some parts of the country have very few authorised financial advisers.

Last year 107 people left the profession while only 87 joined the industry.

The West Coast of the South Island had the lowest number of authorised advisers per head of population with just 1.2 per cent 10,000 people despite having a median weekly income of $1368.

Gisborne had the second lowest at 1.3.

Wellington had the highest number of authorised adviser per head of population with 5.1 per 10,000 people followed by Otago at 4.5. Auckland had 4.2 per 10,000 people.

Authorised financial advisers have to meet a minimum qualification and follow ethical standards.