Receivership was expected from the moment Dominion Finance suspended payments to investors, says the Shareholders' Association.
Association spokesperson Bruce Sheppard says market conditions alone cannot be blamed for the growing list of finance company failures.
Dominion Finance was placed in receivership on Wednesday, owing $224 million to 6055 investors.
Mr Sheppard says finance companies still operating will have diversified risk into sectors other than property.
Dominion Finance trustee, Perpetual Trust, says it rejected a proposal by the finance company to sell its assets gradually, saying receivership will be better for investors.
Dominion Finance reported a $108 million loss for the year to March because of a slump in the property development market.
The company wrote off $122 million in bad debts and goodwill, and said it had breached its banking and trustee covenants.
Perpetual Trust has appointed Rod Pardington and Barry Jordan of Deloitte as receivers. It says it is too early to say how much investors will get back.
Bernard Hickey, managing director of interest.co.nz, says 41 finance companies have now failed or had their funds frozen, placing at risk $5.7 billion for more than 150,000 people.
Mr Hickey says investors will welcome the receivership, but should not expect big returns.
Lehman Brothers jitters
Meanwhile, shares in one of the United States' leading investment banks, Lehman Brothers, have hit their lowest level in a decade, raising fears for its future.
The bank has been badly hit by the crisis in the mortgage and credit markets in the US and is struggling to find fresh capital from investors.
Lehman shares lost a third of their value after the Korean Development Bank announced that talks about a cash infusion had ended without a deal.
Lehman, the fourth-biggest investment bank in the US, has been seeking ways to raise $US6 billion after sustaining credit crunch-related write-downs and losses. It suffered a second-quarter loss of $US2.8 billion.
There has been speculation on Wall Street in recent months that the bank may fail.
John Barsi from The Wall Street Journal Asia says investors are in for a nervous few days.
A rival US financial house, Bear Stearns, came close to collapse in March before the US Federal Reserve backed a last-minute takeover.