29 Apr 2010

Strong finance regulator long overdue - Consumer

8:07 pm on 29 April 2010

Consumer New Zealand says a new super regulator to oversee the financial sector is long overdue.

Commerce Minister Simon Power says the Financial Markets Authority will have the power to stop future finance company collapses that have cost thousands of New Zealanders their life savings.

Consumer New Zealand chief executive Sue Chetwin says the new body must have the power to help investors litigate and enforce new regulations around financial reporting and investment advice.

She says the current situation - in which regulatory powers have been spread among the Securities Commission, the Ministry of Economic Development, the Stock Exchange and the Government actuary - has been a minefield for investors.

Burnt investors sceptical

However, Wellington man Jim McSoriley, who lost half the proceeds of his house sale after following the advice of a financial advisor, says the lack of regulation has allowed dodgy practices to continue.

Mr McSoriley says big companies should not be able to distance themselves from the actions of so-called independent financial advisors, who acted more like sales people.

Kapiti Coast retiree Roland Crone who lost money in six finance company failures, says it will take major changes to restore the faith of mum and dad investors.

Mr Crone says he knows of people who have lost their entire life-savings and have been forced to find work in their old age.

He says the new authority will not do anything to help them.