"It ain't us" - Kiwibank says it's not FMA target

Kiwibank says its KiwiSaver funds were not the target of recent FMA warnings about potentially misleading statements in offer documents. Photo / NZ Herald

Kiwibank says it is not one of the two KiwiSaver issuers pulled up by the Financial Markets Authority (FMA) for potentially misleading statements in offer documents.

Stuart Bremner, Kiwibank general manager wealth and insurance, confirmed it was one of the 15 KiwiSaver providers audited as part of a review of the industry by the regulator.

But he said Kiwibank, which operates the Gareth Morgan KiwiSaver scheme and the Kiwibank KiwiSaver scheme, was not one of the two providers which the FMA said it was taking action against in a report published last week.

"With respect to your recent inquiry regarding KiwiSaver schemes that have been pulled up by the FMA "it ain't us"," said Bremner in an email.

Bremner said it was unfortunate the recent announcements had created "a game of guess who?" in the industry and amongst investors.

"It's good to see that the FMA are pulling providers into line with respect to performance reporting and disclosure.

"But it's unfortunate that a minor matter has been played out in the press in the manner that it has." The FMA has declined to name the two providers and has said its problems in the offer documents were "at the compliance end" of its regulatory scale.

The investment regulator has declined to name the two KiwiSaver issuers highlighted in a report released last week after a review of 15 KiwiSaver schemes.

But yesterday it released details of why it decided to take action against those issuers.

According to the FMA the first fund had insufficient disclosure of key terms and conditions when it came to withdrawals from the fund.

The second fund had inappropriate disclosure of past investment performance and asset allocation disclosures contained in advertising material.

Elaine Campbell, head of compliance monitoring at the FMA, said both funds had since agreed to make changes.

Campbell said the first fund would make the changes shortly and the second fund would amend its advertising material immediately and make changes to its offer document in September.

She said the regulator had not required the withdrawal of the funds' offer documents nor did it feel the need to issue stop orders.

"Nevertheless, FMA considered that clearer disclosure in each case was required.

"In both cases FMA has achieved the desired compliance by engaging directly with the providers about the issues that FMA has and the improvements it expects to see made."

Campbell said the FMA endeavoured to work with the financial markets sector to help it understand and willingly comply with its expectations.

Exactly which funds were under pressure by the regulator has been hotly talked about around the industry but no names have yet emerged.