Investment statements need to be ‘relevant’, Power says
Company investment statements set to undergo an overhaul in Securities Act shake-up in the next two years need to be “relevant” and not disclose copious amounts of information that will never be read, according to Commerce Minister Simon Power.
Friday, August 28th 2009, 9:40AM
by Paul McBeth
“Investment statements being made available to investors need to be relevant,” Power told Good Returns.
The difficulty for investment statements was finding the middle ground between being idiot-proof and accepting that there has to be a certain amount of risk.
“In the end, we need to get a balance of the two paths… you can’t get away from the fact that there’s some risk involved.”
Power hinted at a possible proposal that would see greater tailoring of investment statements at a conference in Wellington this week, saying they have become “meaningless” and don’t help investors know “just what it is they are investing in.”
He floated a proposal to introduce so-called wealth warnings which would “give investors an instant overview of matters such as risk, return and fees.”
Any changes will be part of the review of the Securities Act, and he will release a discussion document on the proposed changes later this year. P
ower told the conference that he has also decided to make some “limited changes” to the Financial Advisers Act and Financial Service Providers Act, but was unwilling to go into further detail when asked by Good Returns.
Paul is a staff writer for Good Returns based in Wellington.
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