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Correspondence

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[copy of letter sent to NZX Ltd]

                                                                                                                    12th May, 2009.
 
The Chairman,
NZX Ltd,
PO Box 2959,
Wellington.
 
Attention Mr Andrew Harmos.        
 
Dear Andrew
 
Re Shareholder Education.
 
During the company’s AGM you have been reported as saying “Share market operator NZX, must underpin the education and evolution of the New Zealand investment psyche.”
 
For some years we have watched the NZX, the Securities Commission and other government agencies accept money for the education of potential investors, and simply pour that funding into swept-up websites. Our research shows that people who learn about investing in a classroom environment have a much greater understanding and increased motivation to participate in the sharemarket.
However, there has been almost no attempt by publicly funded organisations to reach the general public, with an independent; face-to-face offering to encourage them to become investors, and in particular to increase their knowledge of, and interest in the sharemarket.
 
 
At a recent branch meeting of NZSA members, a large section of the meeting indicated that it needed further education programmes.   All the research shown on the Retirement Commission website indicates that our levels of financial literacy are low - at their lowest amongst our poorest, but also low amongst those who have the ability to save.   Had NZX and others spent its education money more wisely NZ investors might have been more discriminating about their deposits in finance companies.
 
Over the past year NZSA has attacked the problem from two directions.
 
 
  1. We have relaunched our investment courses for members and non-members with an updated programme, and we are conducting seminars in Auckland this month, while in other centres our programme forms an important part of the Evening School, Community College education offering. We have course books and power point presentations for tutors. A copy of the summary of courses from our website is also attached. Our aim is to make financial literacy a subject of conversation at the family meal table. These programmes have proven benefits and have been successfully delivered to thousands of members of the public.
 
  1. The NZSA has been instrumental in the establishment of an independent trust called FLOW (Financial Literacy in Our Workplace Trust) This is because research shows that the best place to talk finance to the ordinary worker is in his workplace. FLOW has partnered with Enterprise NZ Trust to develop Financial Literacy courses, The courses have been market tested, and the programme is delivered by Skills 4 Work (a specialist training organisation) Currently they are being delivered in several major organisations and an apprentice training ITO. A copy of the FLOW leaflet is attached.                                                                     The development of this independent charitable trust was seeded by NZSA  members because we felt it was important for the development of our capital markets.
Now the crunch line.   The NZSA has run out of money, but we need to maintain spending on subsidising the investment courses for the public, keeping stock of the course books, further developing the course material to keep it current.   
In FLOW, it is a similar story. The Trust needs more printed material, further development of course work, and we need to promote the programme to a wider business audience.
We believe it is in your interests and ours to keep up the momentum of our initiatives, which get right at the heart of New Zealand’s savings and investing problems.    We believe every saver in New Zealand should own shares, as part of a diversified wealth plan, and that this would help to lift our performance in the OECD rankings.   No organisation has so far put its money where its mouth is like NZSA, and yet we have not received any help from those who claim public money for the same objectives. We would appreciate the chance to discuss this further, next time you are in Auckland. We look forward to hearing from you.
 It is our usual practice to screen our letters past the board members, and to publish them and the replies on our website.
 
Yours sincerely,
 
 
Alan Best
Director NZSA.