Capable, confident and well-informed investors are an essential part of healthy financial markets. Part of our role is to help investors build this capability.
Our first Investor Capability Strategy in 2015 identified that investors needed help to build their levels of capability. Since then, insights we’ve gained from the key activities outlined in our 2016 and 2017 Annual Reports have given us a better understanding of how to influence investor behaviour.
The Investor Capability Strategy 2017-2020 sets out our new areas of focus – responding to the ‘investor understanding’ and ‘investor behaviour’ drivers of risk identified in our Strategic Risk Outlook.
The Investor Capability Strategy 2017-2020
Build investor confidence and understanding by: “Creating safer and more transparent financial markets so investors can better choose and use appropriate financial products and make informed investment decisions.” We will continue to work closely with other Government agencies, market participants, and community organisations to achieve this objective. We will share our research to understand what helps investors make good decisions, and stay up to date with international research and conduct.
Our focus area
Previously our core target audience was people aged over 50 with money to invest. Survey demographics and analytics from our direct, online communication with investors show we need to widen this target audience. As a result, we will now focus on positively influencing the behaviour of all New Zealand investors in the following areas:
choosing and using investment products
complex investment products
awareness of high-risk ‘investments’
avoiding fraud and scams
getting help and advice
How we will target investors
Influencing how industry engages with investors
Through supervision and regular monitoring
Ensuring practices and services focus on good customer outcomes
Cross-agency work and contribution to policy
Disclosing information about KiwiSaver (such as fees and member engagement)
Conducting more behavioural insights trials to see what works
What we want investors to do
Use licensed providers
Know the warning signs of scams, and check our warning lists
Shop around for products – read disclosure information, make informed decisions and get advice when needed
Be aware of investment risks
Regularly check their investments
For KiwiSaver, we want members to
Understand the impact of fees on returns
Choose an appropriate fund
Ask the right questions before choosing or changing their KiwiSaver provider
How we will measure progress over time
An improvement in our overarching investor confidence index (SPE)
A sustained high percentage of website visitors surveyed who rate our content as useful in helping them to make informed investment decisions (SPE)
An increase in investors surveyed who report they are confident in New Zealand’s financial markets (SOI)
An increase in investors surveyed who believe that financial product information they received helped them make an informed decision (SOI) We can show we regularly work with Government agencies and market participants to promote information and materials to improve investor capability (SOI)
We survey consumers to understand current issues and consumer perceptions. Some of these surveys are conducted jointly with other agencies. We also test key resources with an online panel of consumers. Feedback helps us ensure we are clearly communicating the steps a capable investor should take when considering a specific product or activity.
Consumer advisory network
Our consumer advisory network helps us ensure consumer perspectives are considered and addressed in our investor capability strategy and initiatives, and in our broader regulatory activities.
Current member organisations
Banking Ombudsman Scheme
Consumer New Zealand
Financial Dispute Resolution
FSCL – Financial Services Complaints Limited
Insurance and Financial Services Ombudsman Scheme
National Building Financial Capability Charitable Trust