KiwiSaver robo-advice in NZ: Pros, limits, and when to see an adviser

Robo-advice vs human KiwiSaver advice: Which approach suits your needs?

What is robo-advice, and how does it work in New Zealand?

Robo-advice, also called digital advice, is advice a computer program generates from algorithms applied to the information you give it. In KiwiSaver, that can look like answering a short set of questions online, then receiving a fund recommendation.

Not every robo-advice tool runs on artificial intelligence. The regulator's definition is built around algorithms, not AI. Digital and robo-advice facilities are already covered by the financial advice regime. The law itself "has not kept pace with the rapid advancements in GenAI."

There is also a line between advice and information. A Financial Advice Provider can recommend or give an opinion on KiwiSaver. Describing how a product works is not financial advice at all.

General AI chatbots are a different category again. More than a third of New Zealand retail investors use AI tools, like ChatGPT and Microsoft Copilot, for investment decisions. That said, these tools are not robo-advice, and the protections covering regulated advice do not apply to them in the same way.

How a robo-advice tool builds your KiwiSaver recommendation

A robo-advice tool can help you work out a risk profile from your timeframe and what the money is for, which maps to a fund type: cash, conservative, balanced, growth, or aggressive.

Timeframe shows clearly why risk tolerance shifts. Someone withdrawing money in three months has little appetite for risk, while someone thinking about a withdrawal in 40 years has much more, because they can ride out turbulence.

These are calculated nuances that robo-advice can handle. However, you must remember that the result is only as good as the information users provide, and the questionnaire decides what the tool is allowed to know.

Is robo-advice regulated in New Zealand?

Yes, for licensed robo-advice. New Zealand's regulatory framework is technology-neutral, so the same legal obligations apply whether licensed advice is delivered digitally or in person

General AI chatbots are a different category, covered above. Anyone providing financial advice must be licensed by the Financial Markets Authority, or operate under a licence the FMA has issued.

Every licensed provider carries the same duties. They must:

• have the right competence, knowledge, and skill
• put their interests first
• properly explain what kind of advice they can give
• explain how they are paid

Advisers also follow the Code of Professional Conduct for Financial Advice Services, which requires suitable advice, fair treatment and integrity. Every licensed financial advice provider must also belong to an approved dispute resolution scheme.

Technology does not move the responsibility. If a licensed provider uses it, the responsibility for making sure the advice is appropriate and fit for purpose stays with the provider.

What does robo-advice cost, and who pays for it?

Advice is generally paid for either through the fund fee or as commission, not as a separate charge. The paragraphs below explain both. This article doesn't have a current, independently published New Zealand price for a robo-advice tool to quote, so the starting point here is how advice generally gets paid for, whether human or automated.

Advisers are generally paid in one of two ways. One is a fee you pay directly for the service. The other is commission from the provider whose product you sign up to. Paying nothing upfront is not the same as paying nothing.

If an adviser is paid by commission, you may be offered a limited choice of options from only one provider. Advisers must tell you how they are paid. The regulator says clear disclosure on commissions is essential to help clients make informed decisions about the advisers they engage with and the services they receive.

The cost of advice is a separate question from the cost of the fund. A growth fund charging 1.05 per cent a year is about the median. At default contribution rates, it collects about $53,000 more over a 40-year working life than a fund charging 0.25 per cent, in today's dollars.

With Policywise, talking to a KiwiSaver adviser typically costs you nothing extra.

Are robo-advisors worth it for your KiwiSaver? Benefits and limitations

Robo-advice can be a reasonable option when the realistic alternative is no advice at all. Only 28 per cent of New Zealanders had accessed financial advice in the past 12 months, and affordability was a barrier for 31 per cent.

The benefits are real:

• Access. 63 per cent of New Zealanders think about their financial position at least weekly. Engagement isn't the barrier; access is.
• Reach. The FMA sees technology-enabled and hybrid models as a key opportunity, because technology can free advisers for the human conversations

The limitations follow from the definition, not from any fault in the software. A tool advises on the information you provide, so it only knows what you tell it.

Decisions that are not revisited can go uncorrected for a long time:

• During the pandemic market fall, $1.2 billion of KiwiSaver was switched into lower-risk funds, and only $121 million moved back.
• One call-centre worker recalled people "misled by the name KiwiSaver and think it's a savings account." A questionnaire's answers are only as good as the saver's own understanding.

General AI chatbots carry a further limitation. Their output is not personalised, and not fine-tuned to you as an investor in New Zealand.

Your KiwiSaver settings and your income protection are one decision, not two

Three of the six providers Policywise advises on for income protection offer an optional benefit, and one further provider's wording couldn’t confirm. It keeps your KiwiSaver contributions going while you are on claim. On all three that offer it, somebody has to switch it on. None of them includes it automatically.

On all three, it is capped and paid to your KiwiSaver scheme or to Inland Revenue on your behalf. On at least one provider, it stops at age 65. The income protection cover beside it can run to 70.

A tool only knows what it's told, and this was never on it. The government's member tax credit of $521 a year requires you to have contributed $1,042 in the KiwiSaver year.

Separately, non-contribution across KiwiSaver members as a whole follows a similar quiet pattern. Only about 8 per cent of non-contributing members are on a formal savings suspension. The FMA's chief executive has warned of "a stark inequality between the contributing and non-contributing members."

At least one insurer treats an illness absence as different in kind from other leave. Its wording allows cover to be suspended for parental, compassionate, or study leave, but not for disability.

Income protection and life insurance, alongside trauma cover, replace the income a disability claim interrupts. The optional benefit described above is what covers the KiwiSaver-contribution gap, on the providers that offer it. Talk to a Policywise adviser about how your KiwiSaver and cover fit together.

How to choose between robo-advice and a KiwiSaver adviser

Five things decide whether a robo-advice tool or a KiwiSaver adviser suits you better. They are how complex your situation is, your risk profile and timeframe, fees, whether anyone reviews the decision later, and how your KiwiSaver fits your insurance.

A tool handles the risk-profile-and-timeframe question well. The case for a KiwiSaver adviser is strongest on the other four.

1. How complex is your situation?

Complexity is one of the clearest differences between the two. Automated advice suits less complex financial decision-making; for decisions like succession or estate planning, where not everything is purely financial, human interaction is still needed. Withdrawals are where your own KiwiSaver decisions can get more complex, and rising hardship-withdrawal numbers show the financial pressure behind them.

• 58,460 hardship withdrawals were made in 2025, about 10,000 more than in 2024 and totalling $514.8 million.
• A one-off withdrawal is not generally treated as income for benefit purposes. Regular withdrawals could be, and that can affect a beneficiary's entitlements.

2. Your risk profile and investment timeframe

A tool can help you work out a risk profile from your timeframe and what the money is for, which maps to a fund type. Whether the answer still fits you a few years later is a different question.

FMA research shows a sharp shift in risk: the proportion of KiwiSaver in the highest-volatility risk category has quadrupled, from about 10 per cent in 2021 to more than 40 per cent in 2024.

3. Fees, and what you get for them

The fund fee is separate from what an adviser provides. An investment adviser works with you to understand your needs and goals. They find options to suit your situation, explain how each investment works, and help you establish your portfolio.

Set that against the fund fee, which you pay either way. A growth fund charging around 1.05 per cent a year is about the median. See best KiwiSaver providers for how fees compare across funds.

4. Do you want someone to check it again later?

Ongoing review is one area where robo-advice and a KiwiSaver adviser can differ. A Policywise adviser checks in regularly as part of your wider retirement planning.

Your strategy keeps pace with your circumstances, your retirement plans, and current market conditions. We could not find a published New Zealand source on whether a robo-advice tool revisits its own recommendation.

One major provider processed 18,140 KiwiSaver switch requests in March 2020. Of those members, 27 per cent never switched back.

5. Does your KiwiSaver need to line up with your cover?

If illness or injury could stop your income, your KiwiSaver and your life insurance and income protection are one decision rather than two. The contribution benefit described above is optional on every provider we could confirm offers one. It is switched on only if somebody asks for it.

A tool only knows what it's told, and this was never on it.

Talk to a Policywise adviser licensed in both KiwiSaver and insurance, and the two get checked together.

Your KiwiSaver action checklist

The first three checks below will tell you whether the advice you're getting is legitimate. The other three will tell you whether your KiwiSaver and cover are set up the way you think they are. None of them commits you to switching anything. Work through them before acting on any recommendation, from a screen or from a person.

• You can check the adviser or tool is licensed, as anyone providing financial advice must be licensed by the FMA, or operate under a licence it has issued.
• It's worth asking how they are paid, since advisers must take reasonable steps to disclose all fees and costs associated with the advice.
• It's worth finding out where complaints go, since every licensed financial advice provider belongs to an approved dispute resolution scheme.
• It's worth confirming your fund still matches your timeframe, not the one you had when you signed up. What is KiwiSaver covers the basics, and KiwiSaver withdrawal covers taking the money out.
• You can check whether your income protection includes a KiwiSaver contribution benefit and whether it is switched on, since it's optional on every provider we could confirm offers one.
• It's worth reviewing it regularly rather than setting and forgetting it.

Compare your KiwiSaver and your cover with Policywise

At Policywise, we make it easy for you to protect your retirement funds. If critical illness, injury, disability, or death impacts your personal or family income, your financial plans shouldn’t fall apart.  

That’s why we make sure you’re set up with the right insurance cover so your KiwiSaver contributions stay on track and your retirement savings stay intact.

Policywise is a 100% free service which tells you which health, life, and disability insurance provider best fits your needs. We offer fast, comprehensive, and easy-to-understand comparisons of all leading providers and a simple summary clearly recommending which insurer is best for your situation.

Not all insurance policies are the same. Policywise can help you sort out the duds, avoid the lemons, understand the fine print and exclusions, and get the right insurance for you and your family.

We make the important decision of where to buy your insurance super easy. We’ll answer your questions, provide experienced advice and quotes, and manage all the back and forth throughout the application process. Taking out your cover through us means you'll have our lifetime support and claims advocacy, and we'll help you negotiate a positive outcome at claim time. We can also take care of lodging any claims on your behalf and back you up if the going gets tough.

Check out the reviews on our homepage for how other New Zealanders have found our service, because now is the time to get your retirement and insurance plans sorted. Give your family or someone you love the most outstanding financial support possible. Book a 5-minute callback with Policywise today; our service is fast and free.