Recently we’ve seen much negative publicity about previously trusted financial institutions. We’ve read about instances of “mom and pop” investors losing their retirement funds and this tends to make us uncertain who to trust in the finance industry. Trust is a value judgment and requires us to suspend disbelief and act on something that has no proven outcome.

Obviously revelations about the bad practice of some financial institutions in New Zealand has resulted in a move towards regulating the industry. The Financial Advisors Act of 2008 will provide a means for enforcing more rigorous codes of practice from any company with a financial advisory capacity. However, no matter what words are said or rules and laws passed they are never suffi cient in themselves to safe-guard the community against all contingencies, especially in financial markets where so many factors come into play that can infl uence outcome.

So some things to consider when investing are:

1. As a rule of thumb, higher stakes equate to more risk.
2. Nothing of real value is free and though it may cost you nothing fi nancially for advice you may pay in terms of an advisor pushing the product that provides the best reward for them. (Get a second or even a third opinion before making a decision about something as crucial as retirement savings).
3. Being indecisive about what or whom to trust might mean you end up doing nothing.
4. It all comes back to trust. First and foremost you need to trust yourself because the responsibility for the choices you make is always going to be yours.
5. Research as much as you can on products and providers (What are your values and how do you want your money to work for you?)
6. However once you’ve accepted your responsibility, you’ll fi nd research becomes easier because it’s based on self interest and no one can be more passionate about an outcome that involves your loved ones than you.