KiwiSaver and you - Asset Magazine
In a reflection on the impact of the COVID-19 pandemic, Scott Alman, managing director and founder of Consilium, recounts a story highlighting the importance of financial advice during market downturns. As markets crashed amid global chaos, an acquaintance of Alman’s saw his KiwiSaver balance plummet. Panicking, he called his provider – an unnamed bank – for advice. When no one responded, he moved his money from a growth fund to a conservative fund. Unfortunately, he didn’t switch back when the markets rebounded, missing the recovery and incurring significant losses.
Alman stresses that this situation could have been avoided with timely access to financial advice. This experience is not unique – many investors made similar decisions in early 2020, wiping out significant sums from their KiwiSaver balances. The story emphasises the growing need for advisers as KiwiSaver balances rise, particularly with platforms like Consilium’s KiwiWRAP, where investors can receive tailored advice.
But with rising KiwiSaver balances and the Financial Markets Authority (FMA) determined to stamp out referrals and trail commissions – the traditional way advisers have been remunerated – some insurance and mortgage advisers are upskilling and turning their attention to KiwiSaver.
With KiwiSaver assets now totalling more than $83 billion, the savings scheme provides advisers with a massive opportunity to diversify their revenue streams.