MMS #21 | Are my investments safe?! Understanding regs in the finance industry

04/21/24 • 16 min

Colin Magee from Catalist is back, baby! Last time he demystified stock exchanges with Liv, and in this episode of Money Made Simple he helps explains financial regulations to Jennie... Don't worry, it's more interesting than you may imagine! As an ex-lawyer and previous FMA exec, Colin is a fountain of knowledge on the topic and is here to explain the basics so you can feel confident in your investment decisions.
This week's episode covers:

The difference between licensed and regulated providers (and why it matters)
The different rules and regulations covering banks, stock exchanges, managed fund providers, and individual financial advisors
How and why there's actually a double layer of regulation on your KiwiSaver savings
Watch-outs when seeking financial advice (understand who's paying them!)
Key things to look for in working out whether an investment opportunity is "safe"

Resources we mention in this episode:
Sorted.org (the ol' fave for all things financial know-how!)
Colin's great blog on the benefits of a licensed stock exchange
The FMA website's range of regulatory resources
By the end of this episode, our aim is to help you understand that while ALL investing carries risk, comprehensive rules and regulations out there in NZ are in place to avoid what we could call "bad risk" - and let you get on with the business of making the right decisions for you!

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Disclaimer: This podcast contains personal opinions and is intended to provide educational information only. It doesn't relate to your particular financial situation or goals and is not financial advice or recommendations. Simplicity New Zealand Limited is the issuer of the Simplicity KiwiSaver scheme and investment funds. For product disclosure statements please visit Simplicity's website simplicity. kiwi.

The difference between licensed and regulated providers (and why it matters)
The different rules and regulations covering banks, stock exchanges, managed fund providers, and individual financial advisors
How and why there's actually a double layer of regulation on your KiwiSaver savings
Watch-outs when seeking financial advice (understand who's paying them!)
Key things to look for in working out whether an investment opportunity is "safe"

Previous Episode

MMS #20 | KiwiSaver Government Contributions: FREE money you shouldn't ignore

In this episode of Money Made Simple, Liv is joined by Simplicity's Deputy Head of Investor Services Emma Ryan to get the goss on why getting KiwiSaver government contributions is SUCH a no-brainer. (Caveat - that's if you're eligible!). This episode covers:

A quick explainer on the three main types of KiwiSaver contributions and how they all work together
How the KiwiSaver year works (and why it's relevant to getting your govt contributions!)
The three main eligibility criteria you need to meet in order to qualify for receiving government contributions each year (side note - your eligibility could change!)
The impact of government contributions over your working lifetime - you could be more than $90k richer (and that's not taking into account the personal contributions that you'll make alongside!)
How government contributions work if you're partially eligible, or contribute less than the amount needed to get the maximum yearly amount
How to check - and rectify! - whether you've contributed enough each year to get the government contribution

Resources we mention in this episode:
- sorted.org
- IRD website KiwiSaver information (and MyIR)
By the end of this episode you'll be a total pro when it comes to government contributions - and you'll know how to make sure you get the best out of this priceless opportunity to get a 50% return on your KiwiSaver contributions (well, up to that first $1043 at least!).

Next Episode

MMS #22 | Nest eggs for little Kiwis: Is KiwiSaver the best way to save for your child's future?

In this episode, Jennie sits down with Simplicity superstar Sebastian Neubrandt to delve into the topic of kids and KiwiSaver. Should Kiwis under 18 have a KiwiSaver? What's the best time to set up an account? What are the key benefits and are there any disadvantages?
Jennie and Seb both admit that they don't have KiwiSaver set up for their own kids yet, but they're definitely considering it by the end of their conversation.

This episode covers:

The compelling reasons to consider signing your kids up for KiwiSaver, including jumpstarting their savings for a first home deposit or their retirement, and fostering good money habits
If there's an ideal amount to invest. And whether it's better to invest a lump sum and leave it there to grow, or make small but regular payments over time
Who can contribute to your child's account (i.e. beyond parents/guardians - hello grandparents!!) and when they become eligible for employer and government contributions
The cost of having a KiwiSaver account, and why you need to pay special attention to fees
How to set up an account for someone under 18, including what info and documents are needed
If the process of choosing the right fund type differs for children
Whether KiwiSaver is the best way to save for your child's future, and what the other options are

Resources we mention in this episode:
We made our savings calculations on Sorted's saving calculator, using a projected return of 4.5% p.a which is based on government-mandated assumptions for a Growth Fund. More info here.
Sorted.org's KiwiSaver fund finder for fee comparisons
Simplicity's Fund selector tool to help choose the right fund for you
One we didn't mention but could be useful when looking into KiwiSaver for your kids is Moneyhub - KiwiSaver for kids: The definitive guide
Once you've listened to this episode, you'll know some of the pros and cons of setting up a KiwiSaver account for kids, and will hopefully have a much better idea if it's the right thing for you and your family. If you're not a parent but have special children in your life, share this episode with their parents or guardians!