Kiwisaver Regulation Good, But Take Brash To Task

New Kiwisaver Regulation Welcome - But Hold Brash Accountable

The Government's has done a good job in bringing forward the schedule for tightening the regulations around KiwiSaver in light of the Huljich affair, according to market commentator and investment manager Dr Gareth Morgan.

"Simon Power and John Key are to be congratulated in fast tracking the recommendations coming out of the Capital Markets Development Taskforce as they relate to KiwiSaver," said Dr Morgan.

Dr Morgan was responding to the announcement this morning that Commerce Minister Simon Power had fast-tracked work to ensure the integrity of KiwiSaver was protected. In particular the Minister has asked officials to see whether KiwiSaver funds should be required to regularly report in a consistent manner; and to look at ways to increase the ability of the regulator to supervise the trustees of KiwiSaver schemes and hold them accountable.

"The integrity of KiwiSaver and its long term benefits for all New Zealanders is too important to let its brand be tarnished by the sort of shenanigans that Huljich Wealth Management has demonstrated. A strong and decisive response from Government will send a clear message that people can trust KiwiSaver."

"But it's both alarming and unacceptable that Don Brash and the other shareholders of Huljich are attempting to continue to profit off the back of deviously obtained funds. I support entirely the Minister's request for officials to look at what additional powers for enforcement are necessary but I implore them to close Huljich down and return the funds to the six default providers AMP, ASB, AXA, ING, Mercer and Tower. “

“This is the minimum required to demonstrate to the New Zealand public that the tricky dicky days of financial sector providers pulling the wool over the public, are over. The whole point of principles-based regulation that the CMD endorsed, is to show that only providers that act with principles of fairness and equity to those whose funds they care for, deserve to be in this industry. The directors of HWM, by acknowledging wrongdoing, but seeking to benefit from that wrongdoing, have shown they are not fit persons to operate in this sector. That needs to be drilled home by Simon Power. That Don Brash is a former leader of National is irrelevant to this matter".

"The Government has a great opportunity here of setting an example as to the desired standard for ethical behaviour in the sector. I sincerely hope they follow through on it," said Dr Morgan.

ENDS

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