KiwiSaver Advice: Do You Refer or Manage It In-House?

For New Zealand mortgage and insurance advisers, the role is changing. Clients are looking for a long-term financial partner, and KiwiSaver is a central part of that relationship.

The reality is that most New Zealanders have never received professional advice on their KiwiSaver account. By addressing this gap, you are providing a vital service that ensures your clients are in the right fund, contributing correctly, and on track for the retirement they expect.

The Case for Providing Advice Yourself

Moving KiwiSaver advice in-house is one of the most effective ways to grow the value of your practice while deepening client loyalty.

Better Outcomes for Your Clients

Most Kiwis are sitting in default funds or have an incorrect risk profile simply because they have never been offered a professional review. When you manage this conversation, you ensure their largest asset outside of their home is working as hard as possible. This builds trust and could mean the difference of hundreds of thousands when they retire.

Building a Defensive Moat

When you manage a client's mortgage, insurance, and KiwiSaver, you create a moat around that relationship. Keeping it in-house ensures you remain the primary point of contact for their entire financial life and could prevent client leakage to other advice businesses.

Significant Business Valuation

KiwiSaver offers some of the best Lifetime Value (LTV) of any financial services product. While mortgage and insurance books tend to reduce over time, KiwiSaver funds traditionally grow as your clients contribute to their funds and the market grows.

• Trail Multiples: KiwiSaver trail is often valued at a 4x to 5x multiple.

• EBITDA Valuation: If you package KiwiSaver revenue alongside your lending and insurance commissions, your entire business could be valued as a multiple of EBITDA rather than just a multiple of trail. This significantly increases the market value of your business when it comes time to sell.

The Pros and Cons: Referring vs Giving Advice In-House

Every business is different, and there are two main ways to handle KiwiSaver. Here is how the referral and in-house models compare.

Option 1: The Referral Model

This involves partnering with KiwiSaver providers and using their in-house advice teams to look after your clients.

• Pros: It is very easy to set up from day one. It allows you to stay focused on your core mortgage or insurance business while ensuring a standardised process for the client. Our provider partners are specialists in this space and have dedicated teams to manage these referrals.

• Cons: Your client might deal with a different adviser each time they have a question. Over the long term, you may lose some of that "ownership" of the relationship that you have worked hard to build.

Option 2: The In-House Model

This is where you provide the advice yourself as part of your holistic service.

• Pros: You own the entire conversation and the client relationship. Because you have already built a high level of trust, your conversion rate is usually much higher. From a business perspective, KiwiSaver builds a robust recurring revenue stream. It also gives you an opportunity to add more value at review time as the conversation becomes more holistic compared to focussing on fixed rates or premiums. It may also be a good time to elevate support staff to revenue generating roles in the business.

• Cons: You need to complete the NZ Certificate in Financial Services (Level 5) Investment Strand. You also need to ensure your CRM can handle KiwiSaver data and that your compliance policies are updated to include investment advice.

What Does The Study Look Like?

Completing the Level 5 Investment Strand is a commitment, but you do not have to do it alone. Most KiwiSaver providers who work with advisers are happy to help support your studies. In many cases, they offer discounts or resources to help you get qualified, as they want to see more professional advice available to New Zealanders.

How KAN Supports Your Transition

The biggest hurdle for most advisers is simply knowing where to start. If you are with KAN, we make this transition straightforward.

Reach out to the team for help with training on KiwiSaver software and to ensure you have robust policies for your compliance framework. We are here to help you get your advice processes and compliance organised so you can start building that extra business value immediately.