Inside Money: Why politicians are disgusted with advisers

Clayton Cosgrove. Photo / Mark Mitchell

Custard and jelly: these two classic Kiwi desserts were served up occasionally during last month's Parliamentary debate heralding the introduction of the Financial Services Providers (Pre-Implementation Adjustments) Bill.

As Hansard shows, 'custard' featured three times during the debate - it went well with the many 'apple pie' moments politicians fell over themselves to express sweet concerns for 'mum and dad' investors.

National's Melissa Lee, for instance, was a repeat offender: "Getting ahead as a nation economically could well mean our having to get the confidence of the mum and dad investors back on dry ground once again..."

And later she informed the House that during the committee phase, in which Lee participated, the members tried "... to always remember that this bill was designed to protect the unsophisticated investors, the mums and dads, and the retired grandmother who wants to invest so she has a little something to leave as a legacy for her grandchildren.

Often they really have no idea where to start when it comes to investments. These are the people who lost money as the result of finance company failures-quite a lot of money. They could have really used some sound financial advice, and this bill addresses that issue."

But the legislation - designed to impose some sort regulatory oversight of financial advisers - won't stop the world turning to custard.

As I mentioned, custard was well-covered during the debate, however, it took the genius of Labour's Clayton Cosgrove, who worked in PR before entering Parliament, to extend the pudding analogies.

In a space of a few paragraphs - probably hours in Parliamentary debate time - Cosgrove addressed the custard issue before quickly wobbling on to jelly.

"Greater risks exist, I think, in the financial area than in the real estate area," Cosgrove said. "With real estate we have a tangible asset, bricks and mortar. In the financial sphere of operations we have a market that moves and does strange things, and it is more difficult-a bit like trying to nail a jelly to a wall-when sifting through a financial collapse, to determine who is accountable."

I think this distinction is over-cooked. Real estate is also a financial asset which "moves and does strange things" but in a much less transparent way than more regularly-priced assets.

Property, despite its apparent solidity, can also consist of jelly and custard, which, as this recipe illustrates, can make a wonderful combination.

"Simple tricks like this make your kids think you are awesome!," the recipe adds. "Adults are generally quite impressed too - makes it easy to get custard and jelly on the spoon at the same time."

David Chaplin