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
Our objective
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
- KiwiSaver
- awareness of high-risk ‘investments’
- avoiding fraud and scams
- getting help and advice
How we will target investors
Influencing how the 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)
Download the Investor-Capability-Strategy-2017-2020.
