“Heartbreaking” hardship applications a challenge for KiwiSaver providers

In a roundtable discussion for Good Returns’ sister publication ASSET Magazine, providers spoke of the influx of applications they had received as economic conditions deteriorated and recent weather events left people struggling.

“The cost of living crisis has exacerbated the demand and the tension that’s building with those that need their money,” says Fisher Funds’ General Manager David Boyle.

“We’re seeing behaviour, and I understand it, where clients are becoming desperate, almost threatening.”

David Boyle suggests an industry-funded service, administered by Work and Income, might be a more consistent approach than providers taking applications directly.

“They should be a source of truth about whether the client is going to meet hardship requirements before it even goes to our supervisors.

“If everything is in a one-stop shop we can track it, they are in a safe environment, they’re dealing with and being supported by people who are trained to manage high stress circumstances.

“We’re training our staff to deal with these high stress situations but it’s very hard,” says Boyle.

The idea of a centralised service has the support of Kernel Wealth’s chief operating officer Stephen Upton.

“I’m uncomfortable and I’ve always been uncomfortable with a fund manager making determinations whether someone is in hardship or not and having any influence over that process.

“I'd be much more in favour of either the supervisors taking the frontline responsibility on this, because there's only three, or I like the idea of it coming under WINZ, in a model based off Australia’s Centrelink.”

Stephen Upton says clients then get an independent decision made by an independent body rather than KiwiSaver providers carrying the burden.

Pie Funds’ chief executive Ana-Marie Lockyer says it is crucial KiwiSaver members experiencing hardship are offered wraparound support, especially in cases where they sit outside the strict criteria for withdrawal.

“I think WINZ has more to offer them, because there are other support mechanisms that may be available, and they may be disadvantaged because they haven't gone down that track.”

Fisher Funds’ David Boyle says it would ensure everyone gets the same treatment.

“I guess it's a way of delivering a consistent service across the board, on a national basis, rather than those knocking on the door coming into your one office, if you're a small provider.”

New Zealand’s largest provider, ANZ Investments, has also seen hardship requests rise, says managing director Fiona Mackenzie.

“These are incredibly difficult calls to listen to, so for example early last year when we saw weather events there were customers calling in who were underinsured, their house was damaged, their car was a complete write-off, they couldn’t get to work, they were in a difficult space.”

Mackenzie says ANZ Investments has invested heavily in training and customer support and is in the unique position of being able to work closely with the banking side of the business to offer a range of solutions for clients.

“I think there are merits in thinking about a centralised solution, but because customers when they're in that moment are so vulnerable, I would have to be incredibly confident that the customer experience they would get from a centralised model would be up to the standards that we're offering our customers right now.”

Opening a discussion with supervisors is the next step in generating further support for the idea, says Fisher Funds’ David Boyle.