New Zealand First says the Government has failed to introduce regulations ensuring financial advisers’ decision-making is independently scrutinised to protect investors from losses caused by illegal trading.
The lack of oversight is highlighted by the Ross Asset Management fiasco where a sole director with sole investment responsibility led the company to ruin with debts of $438 million.
Rt Hon Winston Peters says the Government has failed over the past four years to introduce regulations to protect New Zealand investors from rogue sole traders such as David Ross.
“The Prime Minister has repeatedly told the country that the issues that led to scores of finance companies going belly-up had been dealt with. That is simply not true.
“Asset managers in New Zealand are handling millions of public dollars yet are not subject to any management oversight or governance controls on just how they do that.”
Mr Peters says that was a major cause that contributed to the collapse of about 50 New Zealand finance companies during the global financial crisis which has not been remedied.
“We accept that most finance advisors are honest but quite clearly, some are not.
“If one suddenly goes rogue to try and get out of a financial hole then there are no Government mechanisms in place that would alert the appropriate authorities.
“This glaring loophole needs to be addressed by the Government with urgency before more mum and dad investors lose their life savings.
“It’s a classic example of myopic free market regulations which very often leads to illegality and light fingered behaviour,” says Mr Peters.