The start of the KiwiSaver scheme is just months away and you can feel this beast, or should I say bird, slowly starting to prepare to rise up.
A discussion we had at our Monday morning staff meeting showed me that the awareness of KiwiSaver’s birth is starting to rise beyond just the people in the industry.
For something different I thought I would write an occasional series of Blogs on what KiwiSaver means from the perspective of a SME business owner.
Hopefully it will help people in the industry and other business owners deal with the issue, and maybe even promote some discussion.
The catalyst was when one of our staff asked what we, as an employer, were going to do about KiwiSaver.
It would be fair to say, and possibly maybe a surprise to many because of our place in the savings industry, that as employers we had done very little!
We have always had a desire to establish a company superannuation scheme in the past, but enquiries to various people in the industry hadn’t got us very far and it all fe l l into the too-hard basket.
I have always found it interesting that the workplace super providers have done little for SMEs in the past. No doubt there are economic reasons for this, or maybe other reasons. Any ideas from people in this space would be interesting.
I ask this question as I wonder if this trend will flow through to KiwiSaver.
No one has made much attempt to strike up a conversation with us so far. There has been one letter from our bank which said KiwiSaver is coming, and that they will offer a product. I thought it was a bit of a light attempt to strike up some dialogue on the issue really.
We will see (and I’ll report) on how this develops and what else transpires. Maybe other providers will start reading this series of Blogs and all be knocking down our door, or perhaps they will be too scared to contact us as they may get criticised! Heaven forbid.
G’day Phil, Being a STMSME (smaller than most small medium enterprises) I to have always had a desire to establish a company superannuation scheme and so far Kiwisaver seems to be the answer.
Up to now most company superannuation schemes have been sold by specialists employed by the large institutions. The few schemes put into place with SME’s have probably been put in place with a lot of hard work (and little remuneration) by a few hard working self employed Advisers. I would also venture to say these proper superannuation schemes are outweighed by the claytons schemes, consisting of employees being sold individual front end, back end, sideways loaded superannuation products.
So the answer as to why the thriving SME of Good Returns has not had superannuation providers knocking down their gold embossed doors is probably the same as for my business, there ani’t no money in it for the suppliers to pay their large salaried specialists to do the job and the poor hard working Adviser seeing the GoodReturns MD corporate Lada in the company carpark (or expired parking meter) could not imagine the MD parting with a large chunk of cash for superannuation consultancy fees, let alone allow the sale of loaded products to his unsuspecting staff.
Speaking of no money in it for the hard working Adviser, it who would appear the hard working Adviser may receive a trial of up to .25% if they sell certain Kiwisaver products. Again the hard working Adviser will become a poor hard working Adviser unless the Adviser can charge the SME owner/directors a fee for providing Kiwisaver advice to the SME employees who are chomping at the bit to signup. If the hard working Adviser can sell some 100-140% up front commission insurance products when selling the employee their Kiwisaver product then the poor hard working Adviser may not be so poor in the short term.
The hard working needs-based financial Advisers are currently being bombarded with road shows, emails and letters from the Kiwisaver lottery winning product providers extolling the hard working needs-based financial Advisers (those at least who have a lot of time on their hands) to attend these road shows, read the emails and letters and learn how to sell Kiwisaver to STSME’s, SME’s and LE’s. One might think the Kiwisaver lottery winning product providers can’t do the selling job or make money out of Kiwisaver without a huge amount of effort on the part of hard working needs-based financial Advisers.
Michael J Shaw Associate Financial Planner, Member IFA, Member SIFA
Managing Director
Wealth Building Strategies Ltd
Philip
I read your blog on the paltry amount of unsolicited mail that you have
received on KiwiSaver as it affects employers. I hope you will find the
attached of some interest. We will be happy to follow up with you in more
detail if you wish.
Regards
Paul