KiwiSaver

KiwiSaver advisers who are reviewing their clients’ investments on an annual basis probably aren’t serving them as well as they could, the founder of an AI business says.

Clive Fernandes is director of Sevaka, which provides AI support for financial advisers. He also established advice firm National Capital.

He said annual reviews had never been best for clients. “The proof of that is the fact that clients haven’t been responding to the call from advisers to get financial advice.

“There has to be another reason other than clients don’t care about their own financial lives. I believe the reason is that we just don’t have the system set up correctly to give clients what they actually need. Right now advice is given on the adviser’s timeline rather than the client’s timeline. Just because a client happened to speak to me for the first time on December 24th, doesn’t mean every year the client’s available on December 24th.”

He said a better option was to try to speak to clients at the points they needed advice.

“The problem with that of course is how do we know when the client needs to speak to us? I Don’t think that’s a problem I’d have had an answer to if we were having this phone call a few years back but now we do,” he said. “Now we have an answer and the answer is to look at the data.”

He said a KiwiSaver adviser should be able to see the KiwiSaver transactions their clients were making, and then use AI to highlight anything that could mean a life change.

“A simple example is KiwiSaver contribution – if the amount has changed I could deduce from that whether it reflects a change in the client’s income. They could still be on 3 percent but now 3 percent of a higher income is a higher amount. Based on that if I was going to reach out to he client not with like ‘book an appointment with an adviser’ but with ‘we’ve noticed this… what are you doing with that extra income?’”

He said it was the approach he suggested to advisers.

“We’re running a technology company that could enable all of this. Rather than them send their client data to us, the system is set up within the confines of the FAP itself. As per the policies and agreements that our advisers have with their clients, they process the client’s data to give them the kind of advice I think clients have always  needed.

"I think they’re going to want even more and more going into the future just because the technology and the capability now exists.”

Fernandes said he expected consolidation in the industry which would allow adviser businesses to invest more in technology. “Most advisers are like ‘I’d love to do it. I have no idea how and I’m currently working 40 hours in my business so I just don’t have the time to look into that. That is a struggle that I guess small business owners have had for a long time.”

KiwiSaver providers want more clarity on how total remuneration packages will be treated with any move towards compulsion.

National said on Sunday that, if re-elected, it would make KiwiSaver contributions compulsory from 2028, and move to a 12% contribution by 2032.

Koura founder Rupert Carlyon said that would be a significant increased burden on people with total remuneration packages, who are currently funding contributions of 7%.

“Personally I think total rem has got to go.”

Pie Funds chief executive Ana-Marie Lockyer had a similar concern.

“As KiwiSaver moves toward a compulsory model understanding how employer contributions will be treated within remuneration packages will be important for both employers and employees.  In addition, the principle of helping more people save is sound, but the implementation details around hardship exemptions, contribution suspensions and support for lower-income households will be important to get right.”

Booster cheif executive Diana Papadopoulos says "proposed higher contributions from both employees and employers would make an even bigger difference to grow the future wealth of New Zealanders, but the issue of total remuneration arrangements needs to be addressed."

"If they’re not used appropriately it can have a really negative impact on people who will miss out on the contributions they deserve."

The Retirement Commission estimates 45% of employers use a total rem arrangement for at least some of its employees.

Kernel founder Dean Anderson agreed the government needed to look at total remuneration agreements. He said it would not be practical for people to lose up to 12 percent of their salary in contributions.

Matt Mackpherson, Sharesies general manager of funds, said it was not clear whether National’s plans included an end to total rem. “These packages go against the spirit of KiwiSaver and employees who receive these packages are not protected by law when minimum contribution levels increase.”

Polling for Simplicity had shown support for compulsion, but economist Shamubeel Eaqub said that was on the basis that it was the employer contributions that were made compulsory.

“My preference would be to make the employer contribution compulsory, keep the employee contribution voluntary and unlink the two.”

National is proposing a range of changes to KiwiSaver if it returns to power, including making the scheme compulsory.

Leader Christopher Luxon said on Sunday that the party was proposing to enrol every child born in New Zealand into KiwiSaver from birth, as of July next year, with a $1,500 kickstart.

Everyone would be required to be contributing to KiwiSaver or an equivalent scheme from July 2028 and would only be able to suspend contributions if they met the criteria currently used for a hardship withdrawal.

It would also make an employer contribution for people on paid parental leave, whether they contribute or not. At the moment, people must contribute to qualify.

“For a stay-at-home mum or dad with two kids, their retirement savings could be around $15,000 larger by the time they reach 65, thanks to this change in policy,” Luxon said.

He said the party would also require employers to continue to make contributions for employees who are over 65.

“Right now, the day you turn 65, your employer can stop contributing to your KiwiSaver. That’s not right, and it’s out of step with how Kiwis actually live and work today. So, that’s why National will require employers to keep contributing to KiwiSaver for workers over 65. Just because you’re 65 doesn’t mean it’s time to stop saving for your future, and it doesn’t mean it’s time for your employer to stop supporting you in that mission either.”

The party would also lift contribution rates to 12% by 2032.

The Financial Services Council welcomed the announcement. It said it would strengthen New Zealanders’ long-term financial resilience and close gaps in the system.

"KiwiSaver is one of the most practical tools New Zealanders have to build long-term financial resilience," chief executive Kirk Hope said.

"These proposals recognise that saving needs to start earlier, reach more people and continue through the life stages where people can otherwise fall behind."

Simplicity chief economist Shamubeel Eaqub said it was a positive direction for the conversation about KiwiSaver to take. He said earlier research by Simplicity showed that people were supportive of these sorts of changes.

Eaqub said it was clear that KiwiSaver was shaping up to be a key issue in this year’s election. NZ First has already revealed it would make the scheme compulsory.  “It feels like it’s a KiwiSaver election in the sense that it’s not just National. Everybody’s got some ideas on KiwiSaver. In the past it was the left wanting to improve KiwiSaver and the right wanting to denude KiwiSaver. Now it’s kind of become a more universal thing that we want KiwiSaver to be stronger, so we have choices in the future.”

[UPDATED – ASB response] A financial adviser worried about ASB’s marketing campaign for its KiwiSaver schemes has taken his complaint to the Financial Markets Authority.

Gareth Dobson, founder and senior financial adviser at Finsol Financial Advisers, said he was concerned that the bank was advertising that its conservative and moderate funds were “number one” in the market, based on a 12-month period to the end of December.

“ASB defends this position as factually accurate because of fine-print disclaimers.”

But he said KiwiSaver was a long-term investment tool and the funds had not performed as well over three, five or 10-year periods.

“Being an investment and KiwiSaver adviser, you stay across historical returns from all the various providers, there’s consistent reports from Morningstar, there’s different sources for returns data. So when I saw this advertisement from ASB pop up on my screen, and I’m an ASB customer as well, I thought ‘oh that’s interesting’."

"Flying the flag of number one KiwiSaver scheme and I was like what’s the justification or this?"

Then I looked at the small print…. Conservative and moderate fund, one-year return. That’s how you’re able to position yourself as a market leader with KiwiSaver.”

He said he asked his network to see whether others shared his concerns and found they did. “Everyone was like ‘no this is not right’. And I challenged them on it. They didn’t even treat it like a complaint, I went through customer service, I got the same email back about five times.”

He said the final response was the bank could not give him what he was looking for.

“I thought well you know what? I’ll go to the FMA.”

He said the FMA had sent a fairly generic email saying it had received the complaint.

“ASB heavily promotes the convenience of tracking KiwiSaver balances directly inside their everyday banking app. There is a deep irony here: a disciplined long-term investor should not be checking their balance daily. Promoting short-term tracking and celebrating a temporary 12-month upswing encourages return-chasing behaviour, which fund managers and advisers consistently warn against. Fine-print disclaimers do not erase the misleading impression created for everyday consumers.”

He said more generally he had concerns about the way banks were treated when dealing with KiwiSaver compared to advisers.

He said while independent advisers were held to rigorous CoFI and FSLAA standards with regulatory pressure to service, document and review client portfolios, the banks were allowed to manage hundreds of thousands of clients based only on mass-produced, automated communication.

Dobson said he recently reviewed a client’s situation where there was $1.7 million in a bank KiwiSaver scheme.

“She was left entirely on autopilot in a moderate fund without any custom asset allocation or short-term cash facility advice. Furthermore, her prescribed investor rate was left incorrect at 28 percent instead of 17.5 percent for three consecutive years.”

He said his complaint was not a commercial dispute between independent advisers and banks but was about whether the regulator would hold major institutions to the same standard of fair conduct, ethical marketing and proactive client care that was expected of independent financial advisers.

ASB says: "All ASB advertising is subject to regular, comprehensive reviews to ensure it is consistent and accurate. Our number one claim is underpinned by the fact that the ASB KiwiSaver Scheme ranked first for 12 month returns in Conservative and Moderate fund categories for the 12 months to 31st December 2025. This has been substantiated by independent Morningstar data, with the basis of the claims, sources used, as well as the limitations all explained or disclaimed within the adverts or on the ASB webpage. This data is publicly available and outlines ASB's KiwiSaver performance across the different time periods."

"We are proud of the work we are delivering to achieve excellent outcomes for our nearly half a million KiwiSaver customers, with our strong returns seeing ASB named KiwiSaver Fund Manager of the Year for 2026 by Morningstar. Since partnering with global fund manager BlackRock nearly five years ago, we have achieved strong investment performance for our investors, with all the diversified ASB KiwiSaver Scheme funds delivering first or second quartile performance in their category, over the 10-year period – this is in the same Morningstar December 2025 KiwiSaver survey. We agree that long-term performance really matters for Kiwi and continue to work on improving customer outcomes over the long-run."