The parliamentary commerce committee's report into the raft of finance company failures has finally arrived, and stresses the need for more money to fund educating the nation's investors.
The report, which was driven by committee chairwoman Lianne Dalziel, recommends the Government boost funding for the Retirement Commissioner to improve financial education, and give a priority to boosting New Zealanders' understanding of financial matters.
"Work is clearly still needed to improve ordinary New Zealanders' understanding of the investment decisions they are required to make in the course of their lives," the report said.
"There can be no short cut to lifting New Zealanders' understanding of financial matters. A multi-faceted approach is needed, addressing issues from basic budgeting to assessing and comparing investment products."
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Advertise with NZME.The inquiry was launched in August 2009 in response to the collapse of the finance sector, which has seen 45 firms collapse or freeze funds, putting $5.95 billion of investor wealth at risk.
The committee focused on how it could help ensure investors would be well-informed and what could be done to reduce the chance of a firm failing, so as to avoid duplicating Commerce Minister Simon Power's work.
The report was reasonably happy with steps taken by the Government to improve securities law, new licensing regimes for entities such as auditors, trustees and financial advisers and the creation of the Financial Markets Authority as a super-regulator.
With Serious Fraud Office investigations trumping other regulators, the committee said the Government might want to consider rolling the white-collar crime investigator into the FMA to reduce delays.
The committee also recommended the Government look into imposing a ban on commissions for financial advisers and said the FMA needed to stringently enforce the code of conduct for advisers.
Other recommendations include relabelling deferred repayment schemes and moratoriums, clearly setting out directors' duties, renaming trustees as supervisors, progressing legislation on class actions and speeding up work allowing investors to seek redress from funds in trusts.
