There are calls for advisers to be more proactive about encouraging KiwiSaver members to seek advice.
Many financial advisers have steered clear of KiwiSaver so far because commission rates are not high enough to compensate for the time involved in giving advice on still-small balances.
But balances are growing quickly. The cumulative value of maturing KiwiSavers is expected to hit $800 million in 2015.
Those earning more than $80,000 who reach 65 in 2028 are tipped to have $13 billion at their disposal.
Clayton Coplestone, of Heathcote Investment Partners, said advisers had told him KiwiSaver members with higher balances were already seeking and prepared to pay for financial guidance to ensure they received the best outcome from their savings.
“Anecdotally this tends to be with non-aligned advisers – as larger financial institutions tend to provide more homogenous solutions.”
Institute of Financial Advisers chief executive Fred Dodds said people with higher incomes and those contributing at higher rates would have significant balances and would want expert advice.
People were starting to make inquiries about KiwiSaver advice, he said, but there was still work to be done in the marketplace. “I think a lot of people are in KiwiSaver and thinking they’re okay. They haven’t done the sums around what they’ll have when they get to 65.”
They needed to be guided in thinking about how much capital they would need, whether it would be left intact or run down, and whether they want to leave an inheritance. “To get a clear picture in their minds they should talk to an adviser.”
Advisers should be willing to take KiwiSaver members on even if it did not seem economic at first, he said.
A client with $25,000 in KiwiSaver would be unlikely to pay for advice and would only net an adviser about $75 a year in commission. But Dodds said dealing with them offered the opportunity of promoting personalised financial advice.
Advisers would often find people needed advice on other products at the same time, such as insurances, he said.
“Even if there’s not a lot of inquiry from the public, advisers should be out there saying ‘are you in KiwiSaver, have you been in there from the beginning? Then you should talk to me’. Get on the front foot, that would be my message.”