Plain English summary 'will help investors'

Mary Holm. Photo / Martin Sykes

The Government has responded well to the recommendations of the capital markets taskforce, except for its decision not to sell state-owned-enterprise (SOE) shares in the short term, says financial writer and taskforce member Mary Holm.

"Selling SOE shares would be terrific for ordinary New Zealanders," she said.

Holm said having a summary in plain English at the beginning of a prospectus would help investors avoid being sucked into financial schemes they would not otherwise invest in if they understood the language properly.

Holm said financial literacy was one of her "big causes" and anything the Government could do to improve Kiwis' knowledge of finances would be helpful.

Free workshops would improve people's knowledge of finances, she said, rather than just the booklets and websites available at the moment.

She said some of the controversial finance companies that ordinary Kiwis lost their savings in had capitalised on people's ignorance.

"They were doing really sneaky things ... people like me were saying 'the higher the interest the higher the risk' and so some of these companies that were actually high risk thought 'we'll just pay lower interest and then people will think it's not so risky'."

Holm said the public did not know where to go for help and guidance, so the Government's decision to consider consolidating parts of the Companies Office, Markets Disciplinary Tribunal and Securities Commission would help address the current "mish-mash" of regulatory bodies.

"It would be terrific if it was cleaner and simpler," she said.