Kate Wilkinson. Photo / Martin Sykes
The Government has delivered a thinly veiled warning to the savings industry to pick up its game when it comes to protecting investor interests.
Speaking on behalf of Commerce Minister Simon Power, Kate Wilkinson told industry members - including trustees who are in charge of looking after the interests of investors - at the Workplace Savings conference, that a lot had been done for the managed fund industry in recent years.
"Initiatives such as the introduction of PIE [portfolio investment entities] and KiwiSaver have helped to arrest a declining domestic industry."
Wilkinson said if compulsory KiwiSaver were to come to pass, the benefits to the industry would also be substantial.
"But anything prescribing that people must save requires an extra level of duty and diligence as to where those savings should be invested. It's not sufficient or acceptable to observe misconduct and fail to report it. We need to ensure that poor practice and unethical behaviour is identified and stopped," she said.
Wilkinson also called on the industry to play its part in ensuring high standards and integrity.
The KiwiSaver industry has been plagued by a range of difficulties in the past year including illegal door-to-door selling at homes, the mis-selling of the product and an investigation by the Securities Commission into Huljich Wealth Management after its former boss Peter Huljich "topped-up" its funds, altering its investment performance.
Wilkinson said a review of the securities law, presently under way, would provide an opportunity to ensure that the new regulator - the Financial Markets Authority - would have the full range of powers it needed to be a proactive and timely enforcer of the financial market rules.
By Tamsyn Parker | Email Tamsyn
