The Government could tighten up the rules covering KiwSaver account managers, Prime Minister John Key indicated today.
Huljich Wealth Management has brought the spotlight on KiwiSaver account management after it failed to disclose that its then-managing director Peter Huljich had injected cash into the funds because it had not performed well.
Mr Huljich said he felt morally responsible for the investment decisions, but others said it was to give a false impression about the funds' performance. The Securities Commission was investigating.
Australian investment research company Morningstar Australasia has also warned KiwiSaver investors to look closely at their providers, as there was a very poor disclosure regime in New Zealand.
Asked if the Government was thinking about tightening the rules, Mr Key said: "That might well be the case".
Commerce Minister Simon Power has already signalled some change and Mr Key said it was important to get it right.
"That is a large and growing investment pool for New Zealanders. There is a lot of New Zealanders who are now investing there money in KiwiSaver and the long-term growth in those funds under management is likely to be exponential.
"So I think the Government does want to feel comfortable that the rules governing KiwiSaver are appropriate and reflect what we expect to be the genuine obligations on managers."
Mr Key said Mr Power could give more comment on policy in that area later this week.
Mr Power recently responded to the Capital Market Development Taskforce report.
In December, the taskforce made 60 recommendations on ways to increase the attractiveness of capital markets to both companies and investors.
Mr Power said some of the recommendations the Government was committed to implementing were:
* introducing plain English into investment statements and prospectuses, with warnings on risky or complex products;
* a more co-ordinated approach to the Government's role in improving the financial literacy of New Zealanders;
* ensuring the duties of fund managers and supervisors are clear and enforced.