More than one-third of fund disclosures had avoidable friction
The FMA reviewed public disclosure for 55 managed investment schemes operated by 37 managers. About 35% used a key information summary to give investors a prominent overview of fees and direct them to fuller details. The review found the opposite problem in other cases: 15% of schemes had missing, unclear or outdated cross-references; 16% disclosed some costs, including brokerage, custody or trading expenses, only in supplementary materials or footnotes; and 8% had inconsistencies between the summary and the fuller product disclosure statement.
These are not merely formatting concerns. If an investor must search several documents to establish whether a custody charge is included in a management fee, or whether a trading expense is additional, the task of comparison shifts from the provider to the customer. That is especially problematic where the fee has a compounding effect on investment returns. A small annual charge can become material over a long holding period, and an estimate is not useful unless the investor can see the assumptions that produced it.
The review found that 35% of schemes presented fee amounts or components inconsistently across documents, while 40% did not consistently follow prescribed categories or wording. Another 35% offered only high-level descriptions that made it difficult to understand what individual fees covered or how they affected returns. Sixteen per cent did not clearly explain the basis on which fees were calculated. In addition, 30% did not clearly distinguish estimated charges from actual ones, and 13% provided limited information about GST treatment.
The FMA recommends presenting a complete view of total cost in the main disclosure, clearly cross-referencing supplementary material and distinguishing estimates from actual fees. Examples should reflect realistic investor outcomes. The issue is whether a consumer can translate a listed percentage or dollar amount into a likely cost, not whether a long schedule lists every possible charge.
Advice and portfolio services raise different conflict questions
For discretionary investment managers, roughly 30% of reviewed providers did not give enough detail for clients to understand what they would pay. About half had unclear descriptions of at least some fee components, 20% did not show one total for percentage-based charges, and around 30% had inconsistencies between documents. A client may therefore need to add separate percentages or reconcile differing GST treatment just to identify the recurring cost of the service.
Financial advice providers showed a related but distinct weakness. The FMA found that 25% of those reviewed had disclosure that lacked sufficient clarity, completeness or consistency. Ten per cent presented information in a less user-friendly way; 20% had records that did not sufficiently substantiate the rationale or basis for fees; and roughly 15% did not disclose fees, incentives or commissions proactively or at the appropriate time. Some of the examples involved clawback fees, the amount due if advice did not proceed, or an actual charge exceeding the disclosed maximum without a clear explanation.
These findings matter because compensation structures can affect recommendations even when the customer does not pay a fee directly. The FMA has separately identified concerns about commissions and incentives in its 2026/27 Financial Conduct Report, including differences in how ongoing commissions and clawbacks are disclosed. The regulator’s broader supervisory focus is on whether consumers can understand both what they pay and whether remuneration could influence the advice they receive.
Earlier enforcement shows the consequences of misleading price representations. ANZ agreed to pay NZ$3.25 million over overdraft fees and mortgage contributions, while Westpac was fined NZ$3.25 million over discounts that were not applied. Though different from the disclosure gaps here, both cases show that cost statements must align with systems and customer communications.
What the review does not yet show
The FMA gave individual feedback and plans targeted follow-up. The report does not identify firms or quantify harm, but shows repeatable weaknesses providers can check.
The measure is whether customers can compare recurring charges and understand when commissions apply. Earlier FMA work on investment providers likewise emphasized clear explanations, while its investor warnings on crypto risks reflect the regulator’s wider focus on informed decisions. The same conduct question appears in the FMA’s action over misleading advice marketing.
For firms, the operational challenge is to maintain consistency across product, digital and adviser channels as prices change. A fee page that is correct while a factsheet is stale can undermine the overall disclosure. So can outsourcing, if a provider cannot verify that an administrator or platform has updated the customer-facing information. The FMA explicitly calls for governance, oversight and periodic review, including where part of the process sits outside the firm.
TakeawayThe FMA’s review found that disclosure was generally acceptable, but recurring inconsistencies still make it difficult for some New Zealand investors to understand total costs and remuneration conflicts. The most common problems were fragmented information, unexplained fee calculations, inconsistent documents and weak records supporting charges. The regulator has already provided feedback; the next question is whether follow-up reviews lead providers to give clients a reconciled cost picture before decisions are made.