OnePath has had a positive response to its “plain English” KiwiSaver investment statement, says ANZ’s head of wealth and private banking, John Body.
He said there were a number of people with KiwiSaver accounts who could not explain exactly how the system worked. ‘
Many people who received the OnePath document responded well to the way it explained what funds were included and how investment gains, taxes and fees affected a KiwiSaver balance. The statement was awarded the WriteMark Plain English standard earlier this year.
It comes after two KiwiSaver providers were asked to change potentially misleading statements to investors or face court action by the Financial Markets Authority.
The FMA has reviewed 15 schemes’ public offer documents, including investment statements, prospectuses, financial statements and information on websites.
Others were found to be providing information in a way that was too vague for investors to comprehend the risks involved. In some cases, returns were being reported in different ways.
The FMA noted some schemes would have to change their reporting to avoid confusing people, such as in situations where returns were measuredly differently before and after the new requirements.
It did not disclose which providers had been spoken to but Body said OnePath was not one of the schemes that had been warned.
He said effective disclosure was important because it could help people to understand what asset allocations they should be in. That would make KiwiSaver more effective.
“The risk I see around KiwiSaver is of people thinking ‘because I’m in KiwiSaver, I’ve got my retirement savings sorted out’.”
He said people should also be thinking about whether they were in the right sort of fund for their stage in life, and whether they had the capacity to contribute anything more to the scheme.