KiwiSaver and creating clients for life.

Rupert Carlyon, Founder and Managing Director, Kōura

So, the markets are not pretty right now. To date, 2022 has been a hotbed of volatility and dip after dip, driving concern – understandably – amongst the KiwiSaver member population.

And just as in March 2020 when the markets skipped a beat and we saw that short-lived Covid dip, this round of market volatility has highlighted once again that Kiwis need someone to call on, to thrash out their KiwiSaver concerns.

Kiwis (in the main) just aren’t well-enough informed about how KiwiSaver (and investing) works. They’ve enrolled in KiwiSaver, often through the bank, and then tend to put it in the ‘set-and-forget file’. That is, until the market goes south.

And I say that not as a dig at the banks – it’s a simple case of supply and demand. There are three million KiwiSaver members, and currently, not enough human-intervention to go around.

Shifting the needle

While we’re a long way from claiming that we have a mature-KiwiSaver investor base in New Zealand, the past two and bit years is changing that.

During the Covid dip and again this year, the “stay calm, don’t crystalise losses, it’s about the long term” message has been getting some good air time and getting through – at least in part. And of course, the markets in 2022 have done a swift job of putting a good-sized dent in KiwiSaver-apathy (for now).

So what does this mean for mortgage and insurance advisers?

It might feel contrary to instincts given the current market upheaval, but if you haven’t already, now while KiwiSaver has the public’s attention, is the time to get involved and explore how KiwiSaver can play a valuable role in creating clients for life for your advice business.

There are options for advisers who don’t carry an Investment licence or Level 5 Investment qualification, the Kōura digital advice and facilitator model is of course one. But I’ll leave you to explore those on your own time. Here I’d like to focus on the role of KiwiSaver in creating clients for life, and how it can reinforce an adviser’s position as the go-to finance professional.

Creating clients for life

You’d be hard pressed to find another financial product that has relevance throughout an entire lifetime, and which three million Kiwis are currently enrolled in.

Starting work, getting married, buying a home, starting a family, building wealth, getting divorced, losing a partner, starting a business, nearing retirement, living retirement…the list of life stages and events goes on. And for each and every one of them, there is a KiwiSaver conversation that’s needed, and an opportunity to deepen your client relationship, and identify and assist with new mortgage and/or insurance needs.  

Here's a quick summary of just some of the life stages and events where KiwiSaver can open the opportunity for conversation (and more). It’s is by no means exhaustive – but rather some food for thought about the potential of KiwiSaver in your client relationships, and for building your advice business.

Starting out

Scenario: Starting work for the first time > the first steps in the ‘financial life’ begin.

KiwiSaver conversation and adviser opportunity: Create a trusted relationship for the financial needs that your client will have through life – their mortgage needs, and / or protection plan. Whether there is a need right now, or a little further down the track, KiwiSaver is your early opportunity to be the adviser of choice.

First home

Scenario: Getting home loan ready > Deposit preparation.

KiwiSaver conversation and adviser opportunity: Use KiwiSaver to start the first-mortgage conversation early, to build your first-home-buyer funnel: Help clients check that their KiwiSaver settings are appropriate if they’re planning to use KiwiSaver for their home loan deposit.

Marriage  / partnership

Scenario: Starting a life with someone > Estate Planning

KiwiSaver conversation and adviser opportunity: Reinforce your position as the go-to finance professional. Has your client considered KiwiSaver in their Estate Planning? If they haven’t considered Estate Planning, period, who can you introduce them to? A conversation starter that becomes an opportunity to talk about future plans for the couple (and more).

Starting a family

Scenario: First child on the way > KiwiSaver considerations

KiwiSaver conversation and adviser opportunity: A big life event with important KiwiSaver considerations, like: How will the couple approach contributions – if one partner takes time off work, is there a conversation needed about how that will impact retirement savings? Plus, the arguments for and against setting up KiwiSaver for the kids, and how to do it. Once again, KiwiSaver provides a timely opportunity to show your value as adviser, and to connect with clients about their needs and plans.

Building wealth

Scenario: Ongoing > KiwiSaver check in

KiwiSaver conversation and adviser opportunity: Think of KiwiSaver as that additional, and important, reason to be in touch with clients, on an ongoing basis. In addition to the fixed rate, home health check and/or insurance review conversations, checking in with clients about their KiwiSaver plan reinforces your role as their go-to finance professional - the first person they call who either assists where scope of advice is relevant, or facilitates the introduction to the appropriate professional / service they need.

Elevation

So, in a nutshell, if you’re looking for ways to elevate your client relationships from ‘product’ (i.e., mortgage) focused, to a professional services relationship with clients-for-life, KiwiSaver is well worth exploring. And let’s face it, as the past two and a bit years has well and truly highlighted, Kiwis could definitely benefit from more advisers taking up the challenge.

Kōura Wealth Facilitator Model

For mortgage and insurance advisers

How it works

All advice is delivered by the Kōura digital advice tool

Clients can — either with you or in their own time — answer a few questions about risk and objectives, and in five minutes or less, the Kōura digital advice tool will:

1.      Provide a recommendation on the portfolio of Kōura funds that is best for them, and

2.      Provide advice on what their Kōura KiwiSaver will give them and compare their current KiwiSaver fund with their existing fund.

The advice is delivered by the Kōura digital advice tool and all responsibility and compliance associated with the advice is borne by Kōura (providing the process has been followed in line with the training provided).

The role of the Facilitator

• Introduce the client to the digital advice tool and ensure that the client understands the advice that is presented to them.
• Be an ongoing point of contact for your clients’ KiwiSaver.
• Follow up annually with the client to ensure that they remain on track for the retirement they are planning for.