He told the 2013 Forensic Conference in Auckland yesterday: “I have to say in the sad case of Ross Asset Management many investors were too trusting with their money. They relied on word of mouth recommendations but did little else.. now that's all very easy for me to stand here and say what they should and shouldn't have done and we know that financial markets can be confusing to the unintiated, but Ross does remind us of the need for investors to do their homework and to become more actively involved in their investments…At the end of the day responsibility starts and ends at home - not with Government, not with regulators, not with legislators. You have to take responsibilities for your own financial well-being.”

He said suggestions the FMA was aware of David Ross’s dealings long before the business was raided were “crap”.

Kapiti investment adviser Chris Lee had previously said the FMA should have been on to Ross sooner.

“That Ross sought to manage, virtually alone, with neither peer review nor trutee supervision, funds that once totalled $850 million, is astonishing.”

He said it was even more astonishing that mainstream operators and regulators appeared to pay no attention.

Hughes said the FMA had done what it could. “It took one phone call, one, for us to take action. Any suggestion that we knew about Ross beforehand is crap… This is not, ladies and gentlemen, a nanny state and one where we can stand behind the shoulders of every investor to guide them to what is prudent for them.”

IFA chief executive Nigel Tate, whom Lee has previously criticised as unqualified to comment on Ross, said Hughes was correct that investors needed to exercise their own agency.

“Sean is being pretty blunt here but there must be some time when the investors take a look at their processes when deciding who to take advice from.  Again this is easy to say but with the level of consumer financial literacy as low as they are, it is very difficult for the investors to make a truly informed decision.”

He said the FMA had acted appropriately with Ross. “They acted swiftly to close him down as soon as they were made aware that there was an issue, it’s very easy in hindsight to suggest that they should have known more sooner, my questions would be how and from where?  David Ross met the requirements for authorisation and got through Standard Set C with relief via the accountants window.  If anything this is an area that the legislators could have done better with but this is not the FMA.”