The Financial Markets Authority gives KiwiSaver providers two options for fee disclosure, outlines its preference 

The Financial Markets Authority (FMA) says it wants KiwiSaver providers to use an investor’s balance at the date the unit of their funds are valued when calculating the dollar amount of fees paid by investors for annual statements.

The regulator says this is its preferred way for providers to calculate fees, but it has offered them a second option, which is the investor’s annual balance. The FMA says KiwiSaver scheme providers must allocate fees charged at the fund level to investors using one of the two methods.

From 2018 KiwiSaver scheme providers must disclose the total fees each individual investor has been charged, in a dollar amount.

“The FMA wants to ensure providers are calculating fees accurately without burdening them with unnecessary costs and ensuring they have time to comply,” the FMA says.

“KiwiSaver scheme providers must allocate fees charged at the fund level to investors using one of the methods below:

a) The investor’s annual balance

b) The investor’s balance at the date the unit of the funds are valued.” 

The FMA says doing so will enable all KiwiSaver providers to detail fees in dollar terms as required for annual statements to be sent to members in 2018. 

“Our preference is for providers to use method b), the investor’s balance at the date the units of the fund are valued. The methodology notice will be reviewed within five years, including a decision about whether all KiwiSaver scheme providers will be required to use method b).” 

“The details of the methodology and response to submissions are contained in the regulatory impact statement published here,” the FMA says.