Is KiwiSaver education too product-driven?

by Ksenia Stepanova21 Jan 2019

The government made a concentrated push towards financial literacy over the last year, with institutions such as the FMA developing initiatives to help New Zealanders better understand the complex task of navigating investments, insurance, mortgages and KiwiSaver.

According to Sam Stubbs, general manager of low-cost KiwiSaver provider Simplicity, these things are not nearly as difficult as most people believe – in fact, they can be very simple if clients have the right tools and a basic foundation of knowledge.

“Money is not complex,” Stubbs told NZ Adviser. “That includes how you spend it, how you save it, and how you invest it. This year, we’re effectively stopping our marketing budget and pouring it all into education.”

“We’re starting up some big initiatives in online education for workplaces, community groups, unions, associations, etc.,” he explained. “We want to talk to anyone who wants to understand the basics of money. It’s a genuine demystifying process, and our core theme is that money is actually very simple – there are only five or six decisions that you’ll need to make in your life to be good with money, and we can educate people on what they are.”

Stubbs says lack of education has undoubtedly been an issue in the past, and it needs to be simplified and not based around products – something which can be misleading and doesn’t usually lead to a fully informed decision.

“We’re a non-profit, and we want people to be wealthy,” Stubbs said. “These education seminars are designed to help customers pay less, and they will teach simple behaviours that will help them to be a wise consumer. The vast majority of New Zealanders don’t really hear these messages, because the business model of financial institutions is based around making a profit.”

“We also don’t think education is nearly simple enough,” he concluded. “The education offered tends to be a little too complex and product-driven. We really want to go full throttle on that, and we’re developing a robo-advice programme that will aim to provide really sensible financial advice and that’ll be accessible to everyone, including our competitors.”


  • by George AFA 22/01/2019 4:54:10 p.m.

    Spoken like a true fund manager....
    There is plenty of 'Simple' financial education out there if clients are prepared to find it
    Just like our health (5 veg, fruit, nuts and 10,000 steps a day) we know what to do
    but intentions and results are different breast...

    As an Authorised Financial Adviser (AFA), disengagement of clients from their investments is my biggest challenge
    (there are other things to think of kids, holidays, the next weekend)

    If I can get my clients to think about their KiwiSaver investments in the early years
    the potential for higher long term results are greatly enhanced for them.
    Financial education is a ongoing process for my clients and yes it can be kept simple...

    and.. by the way other fund managers do
    have got some great 'simple' financial educational tools, you just need to be prepared to find them.

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