Claire Matthews, of Massey University, said the Financial Advisers Act and the introduction of the Financial Markets Authority had not been as successful as they could have been, in improving public faith in financial markets or increasing their stability.

“I don’t think it has worked as well as it desired. I’m not necessarily convinced it’s made the public more confident in using advisers but it has made it more difficult for them to find an adviser because they have disappeared from the market.”

She said it was a situation that would probably improve over time.

“I think to a certain extent the FMA has gone too far, which was a possible reaction to certain events. There was a feeling that they needed to clamp down on certain people in the market. But many people who were doing a good job have now left because of all the regulations they have to comply with now. The collapse of finance companies and a minority of advisers who took advantage of their clients have resulted in the new regulations,” Matthews said.

She said regulations had probably not done much to avoid investors being caught out by more failed investments in future.

Other factors drove collapses such as those that hit finance companies during the global financial crisis, she said. “It comes down to the basic problem of greed. You can’t regulate greed away.”

Greed on both sides had driven the way finance companies were operated and the investors who saw there was money to be made and wanted a slice of it, she said. "People thought 'I want to get some of it myself', without thinking about the risk they were taking."

No amount of education or regulation would be able to contend with that. “Whatever the rules, people find ways around them.”