Curran Clare: Financial Advisers Amendment Bill (No 2) Financial Service Providers (Registration and Dispute Resolution) Amendment Bill — Third Readings 
Text is incorporated into the Bound Volume 
Curran Clare: Financial Advisers Amendment Bill (No 2) Financial Service Providers (Registration and Dispute Resolution) Amendment Bill — Third Readings 
[Sitting date: 22 June 2010. Volume:664;Page:11989. Text is incorporated into the Bound Volume.] 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I rise to speak in the third readings of the Financial Advisers Amendment Bill and the Registration and Dispute Resolution Bill. As members know Labour supports this legislation. It will simplify the implementation of the Financial Advisers Act and reduce costs while encouraging public confidence in the industry. The amendments discussed this morning will strengthen the Financial Advisers Act 2008 and the Financial Service Providers (Registration and Dispute Resolution) Act 2008 both of which were brought in by the previous Labour Government and ensure those Acts serve their purposes. Public confidence in this industry and robust consumer protection are vital today and we must restore confidence and trust in the financial services sector. 
I will comment on a couple of things that have been brought up this morning by me and others and underline their importance. The first is to do with promoting standards and accountability in the profession. A number of other professions have been mentioned in the House this morning such as the legal and medical professions accountancy and the police. Essentially those are the professions we expect when we go to them to seek advice and information to know that we will get quality and that some sort of standard will be attached. Financial advice should be in that league and hopefully with the passing of this legislation it will have that standing. 
The other thing I would like to mention is the importance of financial literacy which has been talked about as well. Unfortunately it has been talked about in terms of it being a problem rather than our having solutions to that problem. As a country we owe it to the people of New Zealand to really grapple with this issue seriously and work out how people can become more financially literate and what is needed to make them so. 
While that discussion was happening this morning I thought about the medical profession and the increasing trend for people to self-diagnose by accessing the internet and googling their symptoms and coming up with their own diagnoses. I am not being overly critical of people who do that because in many cases it does produce some results and interesting discussions with general practitioners and other specialists. But the issue of people who think they know best on financial matters the range of products out there and how their investment will turn into a bigger investment is a big one because financial literacy is not something that people generally learn at school. Perhaps it should be learnt more at school. There are some serious issues about where we should intervene in society to enable people to have more information about how to best use their money. I certainly think that financial literacy is a major issue in our society right now and we need to grapple with it. 
The third issue is about the vulnerability of investors particularly the people we have been talking about who have been most affected by this issue. They are the mum and dad investors the people who do not have a lot of money and often it is their life-savings we are talking about. I want to draw attention as a number of my colleagues have to the member’s bill of my colleague Carol Beaumont Labour’s spokesperson on consumer affairs the Credit Reform (Responsible Lending) Bill which is really addressing this issue and taking it a step further in relation to how to protect people from loan sharks. There is an extraordinary amount of ripping off by moneylenders going on in our society at the moment of the people who are being most affected but who can least afford to be affected. 
When we take into account the extraordinary amount of cooperation and collaboration that has occurred with this legislation in the Commerce Committee and across this House it would be a show of goodwill if the Government actually showed that it had some responsibility about this issue and showed that it was prepared to consider the importance of the issue and take it a step further—and it would be good to note that some members across the House were actually listening to what I am saying right now. 
The Commerce Committee has focused on protecting retail consumers and on enhancing confidence. The select committee has done an extraordinary amount of work in that area and I pay tribute to the committee and all the officials as has been done a number of times in the House today. But it is really important to do that and particularly to praise the chair the Hon Lianne Dalziel. As I said we were focused on protecting retail consumers and on enhancing confidence and on encouraging participation in capital markets. We were conscious throughout the select committee process of remaining mindful of the harm that the legislation is intended to address and the need for a regulatory response to be proportionate to that risk. I believe that that has been achieved and been achieved after a lot of hard work by all involved. 
So this legislation will ensure that the public are protected from people like Neville Cant a Timaru investment adviser mentioned earlier who just last week was jailed and banned from being an investment broker after offering and allotting securities to members of the public without a prospectus or an offer statement. Worst of all he was convicted for stealing about $100000 from clients. 
As members have also heard this legislation is about protecting ordinary investors like Tom and Ann Cawood aged 78 and 75 who were forced to walk away from their home after losing everything in Blue Chip investments. This couple as has been reported in the  
New Zealand Herald 
 like so many were not foolish with their money but rather received misguided financial advice. Similarly Colin and Bev Mossop after the Blue Chip failure found they were devastated after many years of hard honest work and said that their hopes for their future financial stability and enjoyment of life had been shattered. When Blue Chip collapsed in 2008 it was outside our regulatory system and more than 2000 investors were owed more than $84 million. Founder Mark Bryers has been sentenced on 34 charges most of them relating to inadequate financial reporting such as failing to complete or sign off company accounts. His case has been well documented. He has been banned from being a director or manager of a company for 5 years which is the longest period possible and he is ineligible to run a company until May 2015. 
As Lianne Dalziel has said this law will capture the Blue Chips of the future. This legislation will allow the Securities Commission to bring such companies into the system and I hope that the legislation will today send a real message to financial advisers and the financial sector so that we can truly restore confidence in that sector. That plays an important role for businesses in raising capital and this legislation is about protecting ordinary investors. The sector is supportive of the legislation today. It was apparent from the submissions heard before the select committee that the sector itself wants reform and understands its importance. 
Finally I again thank Commerce Committee members for their hard work particularly the chair. The select committee process was inclusive and such an open and transparent process with stakeholders and officials makes this legislation what it is today. It will not solve all the problems in the financial sector but it promises to make a difference. I want this legislation in order to protect people from the Blue Chips of the future and to reinforce public confidence in the industry with robust consumer protection. We must restore confidence and trust to the financial services sector. I commend this legislation to the House.