Kiwis must be responsible for own investments
New Zealanders need to be weaned off a "culture of blame and dependency" when financial investments go sour, the chief executive of the Financial Markets Authority has said.
Sean Hughes told a financial literacy summit that investing in markets meant constantly checking up on your own investments - not taking a "set and forget" approach.
Speaking the day after the Serious Fraud Office announced charges against alleged Ponzi scheme operator David Ross, Hughes said it was a national tragedy that fraud still loomed large as an investing issue.
"The regulators' role is about ensuring investors do have confidence in the markets so that means creating a level playing field so people who are entrusted with investors' money play by the rules and play fairly and put investors' interests first.
''But with my FMA hat on I would say financial wellbeing must start at home and in the schools. I'd also say it's not our role as a Government agency to hold the hand of every investor. We must expect investors to take personal responsibility for their own decisions and that means doing your own homework getting proper financial advice, asking questions and not having a set and forget policy for investments.
"Being involved in the investment markets means being involved continuously.
"I would say we need to wean New Zealanders off a culture of blame and dependency every time there is a financial misadventure."
Hughes said it was comforting to see the results of a Colmar Brunton Survey showing New Zealanders ranked ahead of 14 other OECD countries for answering basic financial literacy questions, but that it would be interesting to see how we ranked versus Australia which was not part of the comparison.
The Australian securities regulator ASIC had a much stronger education mandate, he said.
ASIC has just lobbied successfully for financial literacy to be made a core part of the Australian school curriculum, meaning it would soon be a "core component of learning, not just an add-on", Hughes said.
He acknowledged New Zealand's multi-agency approach to financial literacy education was yet to be as effective as the agencies involved would like.
"We have multiple agencies tackling financial education and I think we're yet to do this in a fully unified way, so progress is unfortunately not as comprehensive or as speedy or as efficient as we might all want.
"It does create the risk of gaps and means we might be missing valuable learning opportunities."
Hughes was speaking at the Commission for Financial Literacy and Retirement Income's financial literacy summit in Auckland, alongside Gerri Walsh of the investor education arm of FINRA in the United States and newly-appointed Retirement Commissioner Diane Maxwell.
Commerce Minister Craig Foss announced Maxwell's appointment yesterday, after the senior FMA staffer and former BNZ public relations and corporate affairs head was seconded into the role left vacant by former Commissioner Diana Crossan.
Asked today why the appointment had taken so long after Crossan announced she was stepping down last year, Foss said the recruitment process began it October but it took a while to establish an appointment panel.
It was important to find a person who was very focused on financial literacy, he said.
Maxwell's connections would be very helpful when it came to partnering with other organisations and companies to run education programmes, he added.