If you're a fan of celebrities such as former newsreader Richard Long and All Blacks legend Sir Colin Meads, prepare to see a lot less of your heroes on screen.
New laws being drafted by the Government will see celebrities who make misleading endorsements of finance companies liable to face hefty fines.
Commerce
Minister Simon Power has released details of a major rewrite of securities law, including a liability regime under which anyone who makes misleading comments in a disclosure statement or advertisement for a financial product will be liable for a penalty of up to $1 million plus orders for compensation.
Mr Long was the public face of Hanover Finance, which owed $554 million to investors when it collapsed in 2008.
Similarly, Sir Colin backed Provincial Finance, which went into receivership in 2006, owing $300 million.
Neither man knowingly made misleading statements.
However, the proposed laws will likely lead to a reluctance by celebrity endorsers to lend their image to products.
Frankly, why would they?
Consider that most so-called celebrity endorsers have neither the time nor the tolerance to minutely examine what it is they're being asked to say on television.
A quick glance over their script, and so long as there's nothing that overly concerns them, it's easy money.
The idea of having to take expert advice on their personal liability, should the company they're advertising go belly-up, will be enough to discourage most of these people from getting involved.
Mr Long has already publicly said it's unlikely that most celebrities would ever know how sound the firm they were endorsing was, and that had the proposed fines regime been in place at the time, he would not have got involved with his advertisements.
You also have to wonder what this draft law says about how the Government views the average New Zealand investor.
Presumably the aim of the law is to prevent more New Zealanders losing their money in finance company collapses.
Yet, it seems the Government's view is that it's too hard to educate prospective investors as to risks and other tell-tale signs to watch for, to avoid a bad investment.
Instead, it's apparently easier to remove celebrities from our television screens, because their endorsement might somehow entice someone to invest their money in a shonky finance company.
Are we really that stupid?
