Almost half of NZ investors haven't heard of market watchdog, FMA survey finds

Tuesday 23rd June 2015

New Zealand investors are relatively upbeat about the state of the nation's financial markets, but almost half of them have never heard of the entity tasked with regulating capital markets and financial services.

About 48 percent of investors in a survey commissioned by the Financial Markets Authority hadn't heard of the market watchdog, even though about 60 percent of them were either very confident or fairly confident in the nation's financial markets. The FMA commissioned Colmar Brunton to gauge attitudes to the nation's markets, which has shown New Zealanders have become more confident about investing in the local market over the past three years.

Just 3 percent of those surveyed were very confident in the nation's financial markets, with a further 57 percent fairly confident, compared to 5 percent and 53 percent in 2014 and 3 percent and 52 percent in 2013.

"The increase in confidence we saw last year has probably slowed due to the increased volatility in financial markets across the globe," FMA chief executive Rob Everett said in a statement. "Another factor is that New Zealand’s financial markets have recently gone through a period of significant regulatory change and improvement with the introduction of the Financial Markets Conduct Act in 2014, which we are now bedding in."

The biggest increase in confidence came from people earning between $20,000 and $50,000 at 58 percent, while those earning more than $150,000 had the biggest drop in confidence, falling to 78 percent from 93 percent in 2014.

Investors accounted for 76 percent of the 1,000 people surveyed between May 6 and 12, edging up from 75 percent in the 2014 survey and 72 percent in 2013. They were significantly more likely to have heard of the FMA, rising to 43 percent from 38 percent, compared to just 25 percent of non-investors having heard of the market watchdog.

The FMA put the lack of name recognition down to the fact that it was still "a new regulator to most investors," it said in a statement.

The watchdog was set up in 2011, amalgamating functions from its predecessor organisation the Securities Commission with parts of the Registrar of Companies, the Government Actuary, and some of the regulatory roles of NZX, and having an expanded role to try and reinvigorate New Zealand's then-ailing confidence in fairly moribund capital markets.

The regulator has also helped usher in an overhaul of decades-old securities law, which was largely designed to make investments easier to understand for retail investors.

The Colmar Brunton survey found 56 percent of investors surveyed were helped by material they received to make an informed decision on whether to invest, up from 53 percent a year earlier and 52 percent in 2013. However, there was still a third of investors who weren't helped by the material when making their investment decision.

BusinessDesk.co.nz

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