Kiwi Wealth’s new online retirement income tool is more than a calculator but a few algorithms short of full-robot, according to the group’s head of retail wealth, Joe Bishop.
Bishop said the just-released digital tools dished out free to members of the Kiwibank-owned KiwiSaver scheme provide a more nuanced approach to retirement income planning than the standard online calculators currently available.
“There are lots of online calculators out there but they have a couple of issues,” he said. “Firstly, most of the calculators are stand-alone and not very user-friendly. Most of them also are not built into the customer experience, so they don’t provide tools to enact changes.”
By contrast, Bishop said the Kiwi Wealth retirement income tools use real-time KiwiSaver member data plus the ability for customers to enter in a wide range of other financial information such as other savings and assets, income as well as estimating risk tolerance.
The Kiwi Wealth system transforms the member information into a projected retirement income while providing the opportunity to immediately adjust KiwiSaver investment settings.
“But we’re not encouraging switching just for the sake of switching,” Bishop said. “If members choose to keep their current KiwiSaver investment strategy after using the tools, that’s fine – it’s about them making informed choices.”
He said the purpose of the new tools is to “flip” the current KiwiSaver conversation from the current focus on historical performance reports to forward-looking retirement income planning.
While the new Kiwi Wealth online tool does personalise the process, Bishop said the system doesn’t stray into full-blown financial advice.
“We’re provided a demonstration to the Financial Markets Authority and they’re comfortable with what we’re doing,” he said.
At the same time, Bishop said the Kiwi Wealth system could potentially provide some of the ‘robo-advice’ services currently under discussion in the Financial Advisers Act (FAA) review.
“It’s important to be cognisant of the FAA review and anticipate the [robo-advice] functionality,” he said. “There is a lot going on in the robo-advice space both here and overseas… but it means different things to different people.
“I see it as giving people empowering insight into their financial situation and putting the ability to act in their hands. For some people that’s all they need, others will want face-to-face advice.”
Kiwi Wealth plans to continually update its digital tools, Bishop said, and broaden the offering over time.
“KiwiSaver is just the beginning,” he said.
In its submission on the FAA ‘Options Paper’ Kiwibank backs a “digitally agnostic regime”.
“Kiwibank sees digital tools as an effective way of providing even greater access to low or no cost sound everyday financial advice,” the bank’s submission says.