Fees, performance and risk – all relevant for investors, and fund managers, to keep front and centre. Today, I’m speaking with Paul Gregory from the Financial Markets Authority.
Investing can seem a bit daunting, but you know that in order to preserve the value of what you’re able to save, you need to invest – if not for the simple reason that if you don’t, the currency you’re stashing away, will lose purchasing power over time due to inflation.
As most of us focus on the how and the what when it comes to investing, it’s important to understand the nature of risk as you move further away from savings accounts, debt reduction, and term deposits as your lower risk, mainstay investments of yesterday. Investing can quickly become a bit more involved, and in order to make the most of it, you need to understand some of the language that goes along with this territory.
Now depending on where you’re at with your investing journey, you’ll likely be involved with some sort of managed fund. All a managed fund is, like KiwiSaver, is simply a pool of money that you contribute to, along with other investors, that get’s invested on your behalf by the manager.
My guest in this episode is Paul Gregory from the financial markets authority (the FMA)– he’s responsible for the FMA’s strategy and approach to investment management providers (aka fund managers). You could think of the FMA as a sort of referee – if you want to play the game of investing, you’ll likely appreciate the fact that some of the risks come from the volatility in the market itself, and some of the risk occurs if there’s a mismatch between the investment, and the investor. While the FMA isn’t there to help you make the best investment decisions you can make, they are there to ensure that financial advisers and fund managers are operating with a high degree of integrity – all with the goal of reducing some of the risks that exist our there.
For further information around the FMA’s activity recently:
LookSee campaign – encourages investors to make sure their KiwiSaver is on track when they receive their annual statement. We will soon relaunch this campaign
KiwiSaver retirement projections: Case Studies
KiwiSaver Tracker – compare the performance and fees of all KiwiSaver providers over 5 years
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