Speech: Shipley - Financial Services Council

Rt Hon Dame Jenny Shipley
Independent Chair, Financial Services Council of New Zealand (Fsc)
Speech to the Launch of the FSC, the Wellington Club, 88 the Terrace, 5.30pm Tuesday March 13, 2012

Tonight we formally celebrate the formation of the Financial Services Council of New Zealand.

The Investment, Savings and Insurance Association (the ISI) had served the sector well but now is the time for a new approach and a new emphasis.

The FSC has 20 full member and 18 associate member companies managing more than $60 billion in savings and providing other financial services to more than 1.8 million New Zealand investors and policyholders assisting them in their wealth creation and risk management.
The formation of the FSC comes at a crucial time for the financial services sector as we seek to re establish public confidence in the sector and work together to protect and increase the wealth of New Zealanders.

I am delighted to accept the role of independent chair, having been an independent ISI board member.

In the past the sector talked about the industry alone.

The FSC members now overwhelmingly agree that there is a much bigger job to do and will be seeking opportunities to work with others in the sector to increase our effectiveness within the resources available.

With the recent loss of confidence in the financial services sector, the move to principles-based rather than industry-specific regulation, and the fallout following the Global Financial Crisis, FSC members believe this is the right time to establish an effective pan financial services sector organisation.

The Financial Services Council is formed by New Zealand’s leading wealth managers.

For the industry, the FSC’s aims are to

• be recognised as an organisation that represents the interests of the New Zealand financial services industry as well as the wider interests of all New Zealanders

• develop and promote evidence-based policies and practices designed to assist New Zealanders to build and protect their net wealth

• promote the financial services industry for the economic benefit of New Zealand

• promote best practice in the financial services industry, including through the publication of guidance for industry participants

• promote the financial services industry as a medium for investment or protection to the public of New Zealand; and

• promote, assist and generally advance the interests of Members.

For New Zealanders we exist to achieve three outcomes:

To

1. increase their wealth;

2. protect their lives; and

3. provide them with a comfortable retirement.

Why must we do this?

We know there are large numbers of New Zealanders without enough wealth to ensure they can buy homes, start a business, enjoy full health care and save enough for a comfortable retirement.

Statistics New Zealand finds the richest 1% of New Zealanders holds 16.4% of the country’s wealth. The poorest 50% owns just 5.2%.

We are determined to work with Government and New Zealanders to change that, not by reducing the wealth of a few, but increasing it for all.

Tonight our other speakers and I will provide you with brief insights into the scale of the issues New Zealanders face, and the immensely exciting opportunities to solve these, being revealed by the research we already have underway.

As a country, and as policy makers and leaders within it, we must now choose opportunity over crisis.

We need to avoid a coming retirement funding crisis. Many more people are retiring and are also living much longer in retirement. Very soon we will release a longevity study that FSC has commissioned that will contribute to this discussion

Our latest research finds that, at the moment only one-third of adults feel they will retire with enough income to cover basic costs.

A further challenge is to save enough:

• 6 out of 10 New Zealanders do not know how much they will need and 45% are not really planning for retirement at all.

• Another six out of 10 say they are not saving enough.

• And nearly 80% of respondents had some concern that their savings would run out before the end of their lives.

We know the enormity of the fiscal, savings, policy and political solutions we must deliver together and FSC and its members looks forward to working with others in finding sustainable solutions..

This is why we have founded and tasked the FSC as we have.

It is a time for New Zealanders to be strategic, not reactionary and the private sector members of FSC look forward to working with the public sector and our political leaders to deliver research-based solutions that work, not only for the industry and political parties, but for New Zealanders.

Our main purpose in establishing the FSC is to increase the wealth of New Zealanders and we intend to strive to do just that.

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