Age Concern New Zealand Media Release

Protect older people's nest eggs – Age Concern

16 October 2009

Age Concern New Zealand has told the Inquiry into Finance Company Failures that the finance sector needs an overhaul to give more protection to older people.

"Older people have been hit hard by the recent failure of so many finance and investment companies.  Many have lost some or all of their 'nest eggs', the result of years of work and careful saving.  Money they invested in good faith has gone, and with it, for some, their plans for a comfortable retirement."

Over the past three years about 30 finance companies have failed in various ways.  Some have failed even after investors voted them extra time through moratoria.

Age Concern, in its submission to Parliament's Commerce Committee, calls for comprehensive changes including increasing consumer protection, better advice, reliable information about investment proposals, restoring ethical business behaviour including preventing suspect directors and managers from doing further damage, and redress for finance company victims.

"Many investors have lost all their life savings and are facing ongoing distress and hardship.  They need to be respected and kept informed as affected parties.  They need to feel that justice is being done, and that all measures possible are being taken to recover their savings. 

"The general public, too, needs to be reassured that this is happening – the process therefore needs to be transparent and public if any faith is to be retained in the New Zealand financial sector," the Age Concern submission warns.

Age Concern says advisers must be banned from receiving finance company incentives. "People need objective, unbiased financial advice - advisers receiving commissions simply cannot be trusted to give such advice.

"The line between providing advice and marketing a product has become blurred."

Age Concern New Zealand also included advice from older people themselves to assist seniors to keep their money safe and to avoid setbacks such as the finance company failures.

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