Since the changes in March 2021 to the laws governing how financial advice can be provided and by whom, there have been over 680 Financial Advisers that have left the industry. That sounds like a small number. There are a further 500 that are at risk of being deregistered because they have not followed the process to become compliant under the new laws. Again, that sounds like a small number.
The thing is, it will make a difference to a large number of Kiwi’s financial futures. Financial literacy within New Zealand is a real concern and we see evidence of this with over 400,000 Kiwis still having their KiwiSaver Funds in a default scheme, earning low returns and being taxed at the top rate. Many of these KiwiSaver members are often paying too much tax and should be in a higher growth fund to meet their risk profile and to help their funds to work for them. This is part of the reason that the government has reviewed and is changing the default KiwiSaver Schemes that we talked about recently.
So why is it important to know that Financial Advisers are leaving the industry and how important is that to us? Kiwis are great at doing it themselves and we love to be in control and to be independent. What I want you to think about is what specialist skills do you have that enable you to do your job so well and efficiently, and what does the casual observer miss about the training and work experience that you have that makes a difference to what you do? Painting a house or a bedroom is a classic. We can all paint, but the difference in finish and the longevity of the paint job is dependent on the preparation and the application. A professional painter will enter a room or go past a house and know whether it has been done by a professional or not.
As financial advisers, when we are looking at your situation we can often see the things that can be done to improve your situation and to help you to clear your debt faster, or increase your funds for retirement. We can assist you to manage your risk and maintain your lifestyle. This decline in the number of Financial Advisers in NZ means is that there are fewer advisers in the industry to help grow your wealth and support you on your financial journey. The team here at Building on Basics are here and ready to help.