A.            Your question highlights a growing issue that banks and fund managers offering KiwiSaver are having to deal with. There is now over $27 billion in KiwiSaver accounts. ANZ is the largest KiwiSaver provider in the country (if you include their OneAnswer brand) with around $7 billion under management. The ANZ Default Fund alone has over 85,000 members. Yet all providers are expected to help individual members with their queries. 

 

Let’s take a closer look at your question. What you are asking is whether you should continue to hold your KiwiSaver investment, or sell and buy a term deposit. This question requires what we call personalised advice. Only a relatively small number of financial advisers are qualified to give personalised advice on investments such as KiwiSaver, which is regarded as a more complex type of investment. 

 

An Authorised Financial Adviser (or AFA) can give you advice on whether to hold or sell your investment once he or she has spent time finding out about your situation including your risk profile, personal circumstances and investment timeframe. They should to be familiar with the type of investment you are seeking advice on (not all AFAs specialise in KiwiSaver) and must research the fund you are in before advising you whether to hold or sell. 

 

Some bank staff will be AFAs but more will be Qualifying Financial Entity advisers (QFE advisers). They are able to give advice on simple products like insurance, bank term deposits, mortgages and investment products of the entity they are employed by (the QFE) including KiwiSaver or managed funds. Individually registered financial advisers or RFA can give personalised advice on simple products but not KiwiSaver. Confused? You can find out more under the topic ‘Getting Financial Advice’ at the website of the Financial Markets Authority - the agency that regulates capital markets and financial services in New Zealand.

 

I asked ANZ to comment on your situation and a spokesperson replied: ‘The option they choose will depend on their personal circumstances, what income or assets they have, what expenses they have, what lifestyle they want.  Your reader should check with their employer if they are continuing employer contributions.  While they have no obligation to contribute post 65 a number of employers do.  If this is the case the member should take this into consideration before making a decision.  ANZ customers can access free personal financial advice by calling Wealth Direct on 0800 269 238 and arranging to speak to one of our Authorised Financial Advisers.’

 

While most investors can withdraw their funds at 65, if you take all your money out and close your account you cannot re-open it as KiwiSaver accounts can only be opened by people under the age of 65. KiwiSaver is a relatively low cost investment with good reporting and a wide range of funds. At age 71 you may well have another 20 years of retirement ahead of you and your KiwiSaver could serve a useful purpose but this depends on your personal circumstances. You may wish to take up the ANZ offer of free advice.

Shelley Hanna is an Authorised Financial Adviser FSP12241. Her disclosure statement is available on request and free of charge by calling 06-8703838 or go to www.peak.net.nz. The information contained in this article is of a general nature and is not personalised. Send your KiwiSaver questions to shelley.hanna@peak.net.nz. 

As published in the HB Today 2 June 2015