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We need to talk about KiwiSaver fees

Liam Mason, Director of Regulation


Earlier this month I was challenged by a radio journalist about what the FMA is doing about KiwiSaver fees. It was a great chance to talk about our work in this area.


Of course, it’s easy for conversations about fees to focus on whether or not these should be capped or set by law – which they’re not right now. For us, it’s great to see more attention on how much people are paying for their KiwiSaver. But the outcome we want is price conscious KiwiSavers, and providers competing on the basis of value for money.


We approach fees as we do all our work – through the lens of conduct. As we’ve said in our Conduct Guide, communication is a vital part of conduct. We expect KiwiSaver providers (and others we license) to be willing to explain to their investors how the fees they charge represent good value for money.

We’ve made it clear to providers we expect them to be able to discuss their fees with their investors – clearly and simply. We also encourage investors to start that discussion, and we provide them with information and the tools to do it.


Two examples of our work in this area have come out this month. We’ve worked with MBIE to require providers to disclose the dollar cost of fees on KiwiSaver Annual Statements, and we’re encouraging providers also to disclose percentage fees, to help comparisons. And we’ve partnered with KiwiWealth using behavioural insights techniques to help their Default members make an active choice about the fund they’re invested in.


Clear, comparable, high quality information is the foundation of good investment decisions. Getting the best out of KiwiSaver is incredibly important to so many New Zealanders. We’ll continue to look for ways we can work with providers, and share information to help investors know what they need to know.


Liam Mason

Director of Regulation, FMA



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16 June 2017

Consultation: Proposed guidance on substantial product holder disclosures - submissions close on Friday 16 June. Read more ›


23 June 2017


Consultation: Follow up to KiwiSaver annual statements - calculation of total fees in dollars - submissions close on Friday 23 June. Read more ›


30 June 2017


Consultation: Improving financial information in an equity PDS - Submissions close on Friday 30 June. Read more ›


3 July - 31 August 2017


  • Annual AML/CFT reports - reporting entities supervised by us are required to submit their annual AML/CFT report on their risk assessment and compliance programme through our online system between 3 July and 31 August 2017. Read more ›
  • Crowdfunding and peer-to-peer lending providers annual regulatory return – licensees are required to submit their annual regulatory return between 3 July and 31 August 2017. Read more ›


14 August - 30 September 2017


AFA Information return - early notification for AFAs to start preparing for their annual information return. Submissions open on Monday 14 August and are open until 30 September 2017.  Read more ›


Simple ways you can help your customers

Last week we released the results of a behavioural insights trial we ran with Kiwi Wealth. The trial showed that simple changes to written communications, such as appealing to a desire to be like other New Zealanders, can improve the likelihood of people making an active fund choice.  We would like to see all KiwiSaver and managed fund providers making similar simple and effective changes to help investors make better decisions.

Contact us if you’re interested in running your own trial or to explore these results further. We would welcome the opportunity to work with you.


Updated designation notice

In May, a class designation came into effect which designates certain newly issued shares in investment companies as managed investment products (MIPs).  The designation does not apply if the shares are quoted on the main board of the NZX.


We amended the designation so that it does not apply to shares quoted on the ASX as well. This amendment came into effect on 9 June 2017.


FMA levy changes

Last year the Government approved an increase in the FMA’s funding to reflect the significant increase of regulatory responsibilities the FMA must now undertake. The FMA receives funding from the Crown and a proportion of these costs are then recouped from industry through levies.


Changes to the levies are expected to take effect from 1 July 2017 and introduce new categories of levies and increase the amount payable for many levy payers. To see the new levies, please visit MBIE's website.

IMF NZ FSAP Assessment 2017 – technical notes published

The technical notes for the International Monetary Fund’s Financial System Stability Assessment for New Zealand were published earlier last month. Read them here.


What’s coming up?

Look out for the following consultation, publications and guidance coming out soon.   



Strong support was received on our recent consultation for the proposed exemption from the obligation to prepare scheme financial statements for bundled unit trusts. We are now working to finalise our policy position.  If the exemption is granted, managers will still have to prepare financial statements for each of the funds within the notional registered scheme.


Upcoming consultation we’ll be releasing soon:


  • Robo-advice: We will be consulting on possible exemption relief to facilitate personalised robo-advice services under the Financial Advisers Act. Current regulation hinders the development of digital advice models.  Proposed reforms to financial adviser laws will address this, but there is benefit to consumers to bridge an advice gap, by enabling personalised robo-advice  to be offered sooner than proposed law reforms.
  • Market index: We will be consulting on potential exemption relief for MIS managers. The proposed exemption is for managers who cannot provide an ‘appropriate market index’ for managed funds, where these funds have significant direct or underlying investment into alternative asset classes.  Any relief would be on the basis of alternative requirements, such as a peer group index.
  • Content of regulatory returns for DIMS, MIS and DI licensees. As part of the licence conditions, we will be consulting on the questions we propose asking in annual regulatory returns. The consultation will also include an updated proposal for the annual compliance declaration for all FMC Act licensees.

Upcoming publications

The following publications will be released before the end of June.

ICE Futures reports – Before 30 June, we will publish our first ICE Futures U.S. Inc. (IFUS) and ICE Futures Europe (IFEU) reports. We are required to report at least once every two years on how well IFUS and IFEU met their licensed market operator obligations and whether the Commodity Futures Trading Commission and Financial Conduct Authority were satisfied they complied with their obligations during the review period (1 December 2014 to 31 December 2016).

Auditor regulation and oversight report – Our three-year auditor plan that sets out our intentions and expectations to auditors.


NZX general obligations review report – This report outlines our annual review of how well NZX is meeting its statutory obligations, and covers the 2016 calendar year.



AML/CFT – sector risk assessment report – This report sets out our overview of the key risks of anti-money-laundering and counter-financing of  terrorism for the nine sectors we supervise.


Statement of Intent – This sets out our goals and funding.


Statement of Performance Expectations - This sets our financial forecast for the next financial year.



Upcoming guidance 


Disclosing non-GAAP financial information – In March, we published a consultation paper outlining our proposals to update guidance for disclosing non-GAAP financial information.  We have now completed our review and intend to publish this by the end of June. This updated guidance will outline our expectations on how to present non-GAAP financial information, including pro-forma financial information going forward.

Join our team

Join a vibrant and dynamic team that embraces work-life balance, a commitment to employee well-being, and opportunities for learning and development.  Check our website to find out more.


FMA news

14 JunInsider trader sentenced


9 JunFMA files charges under Crimes Act


8 Jun - FMA announces methodology for KiwiSaver fee disclosure


8 Jun - Trial shows simple way to help KiwiSaver members


8 Jun - Innovative Securities fails to overturn FSPR ruling


29 MayFMA survey: Investor confidence bounces back


26 May - RBNZ and FMA welcome new foreign exchange market Global Code of Conduct


24 May - Licensing overview: what the FMA found and what firms need to know


All news
Industry insights

Black swan in the Cloud

London School of Economics and Political Science


Incentives, Peer Pressure, and Behaviour Persistence

Harvard Business School


Smart Contracts: Bridging the Gap Between Expectation and Reality

University of Oxford


Shayne Elliott on restoring trust in banks

The University of Auckland


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