The Weekend Herald had a good article about the collapse of the Finance Companies and the effect on investors, angling the story around a nurse who lost her life savings:
The 62-year-old hospice nurse has had to sell her Nelson home to meet the mortgage payments on an Auckland apartment she bought through failed Blue Chip property investment scheme.
Ufton is just one of the thousands of investors who have lost money in the more than $6 billion collapse of the finance and investment industry.
Instead of looking forward to her retirement in three years, she is working longer hours to keep afloat and expecting to work until she is 70.
The retirement nest egg she hoped to have accumulated by now has been replaced with a mountain of debt after investments in Blue Chip, Bridgecorp, North South Finance and the ING Diversified Yield Fund turned into disasters.
“I wanted to be independent in my retirement,” Ufton says. “The best I can hope for [now] is a small, modest home and New Zealand super.”
The blogosphere being what it is, I guess a lot of people will just sneer at Ufton for failing to diversify her investments – but she was acting on the advice of a professional financial adviser who feels that his client has been unlucky but doesn’t appear to feel any guilt about wiping out her life savings.
I think it’s very admirable that the Herald has continued to cover the finance company collapse and subsequent fall out especially since this has failed to gain traction as a political issue – the Commerce Commission belatedly begins regulating financial advisers some time next year (I’m sure they’re quaking in their boots) but I don’t think there’s been any legislative or regulatory reaction to the finance companies themselves.
I guess the National Party finds it ideologically embarrassing that financiers operating in an admirably deregulated, highly competitive market managed to steal and/or destroy such a massive chunk of the nation’s private wealth, and (presumably) Labour is equally embarrassed that the transfer of billions of dollars from the middle and working class to a tiny handful of centi-millionaires happened under their watch (for the second time in a generation).
Politically the finance companies still seem like low hanging fruit though – it seems like an issue Peter Dunne could do something with, on the basis that he’s supposed to be a centrist that stands up for decent middle class New Zealanders, and it also seems like a pretty good platform for the Green Party – surely their notion of social justice extends to not having your life savings stolen while the Commerce Commission does nothing about it?