KEY POINTS:
It's been a rough year for many New Zealand investors, with finance company collapses sending many hundreds of millions of dollars down the tubes.
Now the Securities Commission, New Zealand's main investment regulator, is launching a new online campaign to get people thinking about where their money is going and who is looking after it.
The commission's new website, www.looklearninvest.org.nz will be launched on Tuesday, accompanied by a big advertising campaign.
It says the website is designed to "help people make better investment decisions".
Commission director of primary markets Kathryn Rogers, says it hopes the new site will give people who are thinking about investing "some fundamental information about how to make wise investments".
It won't be recommending any particular investment or type of investment and will focus entirely on securities, shares in companies, fixed interest investments and unit trusts. There will also be "a bit about superannuation, a bit about futures".
But there won't be any tips about property, gold, oil, stamps or art investments, says Rogers.
"At its most basic level, it's about what people need to know before they invest and how to find out that information."
Recent finance company collapses have prompted inquiries to the Securities Commission from people unsure about how they were supposed to get out of their investments, says Rogers. Many simply couldn't get out.
"So that was the condition they signed up to from the start, but a lot of people didn't seem to have realised that. So it's something people need to think about before they invest."
Rogers says the new website has not been launched because of the recent finance company failures, but because it was part of the Securities Commission's statutory functions, namely to educate people about investing and securities.
"It's possibly timely to be giving people that sort of information given the uncertainties that seem to arise around people's finance company investments."
While the initial material on the new website could be seen as "fairly basic information", it would be added to over time, becoming more in depth.
Asked to give an assessment of the literacy or knowledge of the New Zealand investing public, Rogers demurs, saying other agencies would be better placed to answer.
The Securities Commission is concerned, she says, with securities, not budgeting or other financial needs.
Some of the commission's biggest concerns in the securities area, says Rogers, are around people not being aware of where they can actually get information from.
"... they don't seem to be aware that perhaps there is an investment statement or they should read it and that there is other information. They don't seem to be aware that they can request information from their adviser."
"We would certainly like to at least let people know they are entitled by law to ask for information and why they should read it. It's in their interests to read it, it's actually information that is useful for them."
WHAT TO ASK
Questions that the new Securities Commission website will address:
* What kinds of investments are available?
* What does risk have to do with investing?
* What is my personal financial situation, and why is it important?
* Where can I get information about investments?
* What should I expect of an investment adviser?
* How does the law help investors in New Zealand?
The top piece of advice on the site is to ask for the investment statement before any making investment. The person selling the securities has to give you this document - all investment statements contain the same information in a standard format.
These statements tell you several key things about the investments:
* Who is offering the investment, who the people behind it are.
* What fees and charges you will have to pay
* Very importantly, what the risks of the investment are
* And whether you can cash up easily - how easy is it to get out of the investment?
Another tip is to accurately work out where your money is going to end up.
Is your hard-earned retirement savings money going to be lent by a finance company to people for a used car? Property developments in Fiji? Or thousands of small-scale hire purchase deals?
"That's important information for any investment, but for finance companies and debt securities in particular," says the Securities Commission's Kathryn Rogers.
"The company you lend the money to is not the company that needs to pay it back first. It's being on-lent to somebody else. And they are the ones who need to pay it back before the finance company can pay you back."
