Brian Gaynor in Saturday’s Herald argues that investment industry organisations and their advisors owe a duty of care to investors. He calls it an “ethical overlay”, and says
Unfortunately a number of developments indicate that we seem to be a million miles away from having this ethical overlay. There is little incentive for New Zealand capital market participants to adopt a principled approach becuase our laws are poorly enforced and unethical behaviour is often well rewarded.
He goes on to give examples and says that is the reason why New Zealand household overinvest in property because they don’t trust the markets, then concludes:
The problem is that we are a long long way from adopting a strong ethical overview in relation to our capital markets. Most professional advisors, directors and associates of the DNZ, Rural Portfolio and NZ Farming Systems Uruguay debacles argue that it’s time for us to move on, to forget these disasters.
The problem is that we keep on moving on from debalce after debacle while making no attempt to improve ethical standards.”
Many of those who have lost their savings in debacle after debacle would agree.