Liam Mason, director of regulation at the FMA, delivered good news and bad news to the Financial Markets Law conference attendees assembled yesterday at the Aotea Centre. The good news, according to FMA reporting the “markets have recovered with astounding optimism.” The bad news, quite a bit else.
Mason presented the data that the FMA had collected over the covid period and been analysing in the months since.
Firstly, Mason ran through the KiwiSaver fund switching numbers. Not surprising was the previously touted 254,000 switched during the April-March period up 54% on the previous year. Over 1.6 Billion dollars were moved into conservative funds.
But what Mason said was “a real concern to the FMA” was that 33,000 people switched twice, 7000 switched three times, 3000 switched four times and 2500 switched five times.
“This highlights the need for the FMA to educate people on risk appetites,” Mason said, “If you don’t have a financial adviser it is really easy to be making these kinds of decisions. The data shows that far more education is needed.”
Adding to the stress of this period for consumers was the surge in scams and cyber crimes. Mason said that the scammers philosophy of “never let a good crisis go to waste” was certainly utilised during the covid period, which saw a 45% increase in scam warnings issued by the FMA.
Scams are often outright stealing the identity of New Zealand companies. “It is almost flattering to New Zealand how popular our companies are in being used by fraudulent enterprises.”
Mason said that, “If you are a New Zealand company with ‘cyber’ in your name it is highly likely you will get your identity stolen in the near future.”
“We have seen identity theft and online scams ramp up over the covid period, and there is no sign that they are going down in future.”
Mason highlighted these issues to show that times of crisis bring out challenges of their own. With economic uncertainty looking like it is here to stay, it is best for those in financial services to be weary of what kinds of elements this environment brings out to play.
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