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An Auckland woman is dismayed her 25-year-old son was approached to sign up to KiwiSaver while living in a long-term mental health facility.
But the KiwiSaver provider, Huljich Wealth Management, says it is wrong to assume people at such facilities are not capable of choosing for themselves.
Under securities law it is illegal to sell any kind of investment products by going house-to-house at residential properties but salespeople are allowed to go to a business.
The Securities Commission is investigating a number of cases after complaints were made to the Inland Revenue about the way KiwiSaver was being marketed.
A spokeswoman for Tamaki Oranga Recovery Centre confirmed a KiwiSaver salesperson had visited the facility six months ago but at the time it was not known to hospital staff including management.
"When the unit manager of the facility was informed about this the following day, steps were taken to ensure that approaches by salespeople would not recur."
The spokeswoman said the unit manager had contacted the salesperson and confirmed that none of the patients had been signed up although they had been approached.
The mother of the man who was approached said she did not have any problem with selling KiwiSaver to staff but questioned the ethics of selling it to people with severe mental health problems.
"It does concern me that this guy couldn't see that it was inappropriate to be even considering young men that were in that type of facility. I think that there should be some sort of ban or procedure where they do not speak to people in this sort of facility."
The woman said the 20-bed facility was designed to help rehabilitate patients back into the community.
Huljich Wealth Management managing director Peter Huljich said he was aware of the situation but said the KiwiSaver distributor was approached by the woman's son outside of the facility, before being invited in.
"Careful consideration was then given in consultation with the facility manager as to whether the applicant was a suitable person to make a decision to become a KiwiSaver member."
Huljich said KiwiSaver was set up to provide retirement savings incentives for all New Zealanders and it was inappropriate to assume that all persons within an institution lacked the capacity to make an informed decision on financial matters.
"We understand the distributor relied on the facility manager at the institution in this regard."
A spokesman for the Securities Commission said the commission could not say whether selling KiwiSaver in a mental health facility where people lived was illegal.
He said the securities law meant it was illegal to sell house-to-house but it did not include a place of work and that meant there were some grey areas. However the spokesman said if the commission received a complaint about door-to-door sales it would investigate.
"In the general nature of door-to-door sales we would investigate any complaints."
