Diane Maxwell
Retirement Commissioner, Commission for Financial Capability, New Zealand

In New Zealand we have shifted from talking about financial literacy to talking about financial capability, based on our belief that “knowing” is not the key—it’s the “doing” that matters. Our lives are the sum of our habits: what we do in the day to day.

I have many habits that I know are not great: checking work e-mails at bedtime, being addicted to social media, and not doing enough exercise, to name a few. They are pretty ingrained, and the question is, what would it take to change them? It’s usually a health scare (ours or someone else’s) or a significant birthday that makes us shift gears. And with money it’s usually a crisis point, a financial rock bottom, or being unable to source credit that effects change. In an ideal world, we would bring about change before the crisis—but how?

I believe that capability is the successful intersection of information and sustainable behavior change, and that to build capability we need to understand the basis for how and when information becomes applied. If we don’t, we stand back in frustration when despite all our hard work, people don’t do what they should do, even after we’ve told them. It’s at that point that many organizations step away, confident they’ve done their part, but some people just won’t listen.

In reality, the information that connects and resonates with us depends on our worldview, our values, our beliefs, and social norms. We ignore what doesn’t sit well with us, but we absorb those things that support existing beliefs. That’s why it’s so hard to bring about behavior change that challenges those norms.

This perspective is critical for our work in building financial resilience and capability across our New Zealand population. We are a relatively young country and a diverse one, with 191 ethnicities in Auckland alone.

At the Commission for Financial Capability, we seek to understand, and we actively ask ourselves, what does a wealthy life mean for New Zealanders of all ethnicities? The word “wealth” has had a bad rap lately. It is increasingly linked to greed, inequality, and a belief that it’s a zero-sum game: if I build wealth, I do so at your expense. The origin of the word wealth is “well-being,” and in New Zealand we are working to reclaim and redefine it.

For the 25 percent of our population who identify as Ma¯ori and Pacific, the reference points for wealth and well-being are often different from those seen through a European, or Pa¯keha¯, lens. For many, it’s about whanau (family), community, and iwi (tribe). Wealth is about the land and the collective.

Social norms in a collective society become all the more important, because being ostracized has greater significance and consequences. The mihi, a customary greeting that starts many meetings, is about telling the story of where you’re from—your iwi and your “path.” If shifting your behavior sets you apart from your community and family, then that constitutes a sizable barrier to change. This gets even harder if the behaviors you’re adopting are perceived as reflecting a Pa¯keha¯worldview. In Samoan, the term is Fia-Palagi, and it means “a Pacific person trying to be white.” And it’s harder still if the change is perceived as taking away from the community (e.g., declining a request for money from church or family).

Historically, many in the mainstream financial services sector—and in the government agencies and nongovernmental organizations that work to build financial capability—have used language and concepts that are wholly based on individual or nuclear-family outcomes: a “what’s mine is mine” philosophy. It goes without saying that this approach often doesn’t hit the mark for some communities and ethnicities.

If covering the cost of my retirement is viewed as the job of the next generation, and successful living is about the closeness of family and richness of community, then a personal retirement savings plan does not excite the senses—unless I understand what it can do for my wider family and can gain greater confidence in the system that administrates it.

The risk is that we effect only short-term change, but if people have an uneasy feeling that it’s not sitting quite right with their core values, that they are being bent out of shape to become something or someone they are not, then it is not sustainable—at which point, it’s just one more voice from the government or the mainstream that misses the mark, one more reason to say, “This has no relevance; it is not for people like me; it’s for other people.” And for those evaluating the work and measuring change, it’s interpreted as yet more evidence that people just don’t listen.

This lack of relevant and effective work to build financial capability, combined with low incomes and home-ownership rates, and a lack of intergenerational wealth are leading to a perfect storm.

But before we race to fix the problem, I’d like to quote a local member of parliament, our first New Zealand member of parliament of Cook Island descent, who tells the story of hearing from his auntie as a young boy, “You are not a problem to be solved. What is your opportunity?” She was right. Don’t make the problem the starting point: start by understanding what success, happiness, and well-being look like.

At the commission, we have built a strong, connected, and diverse team. Some time ago we shed the generic photos of smiling middle-age white folk in pastel sweaters enjoying a sunset stroll across white sands, or relaxing with a coffee in front of an expansive house. We now use photo essays that reflect our actual population and not an affluent parallel universe.

But to be blunt, this is not about finding a brown face to front the same old message and then congratulating ourselves on our diversity. It is about reframing from within communities. On that note, I want to leave the last words to my colleague Peter Cordtz, who talks about what wealth and well-being mean to him:

Kia whakatōmuri te haere whakamua (I walk backward into my future, with my eyes fixed on my past.)

My father came to Auckland from Samoa for the same reason myMa¯ori mother left the safety of her ancestral lands in the far north—the opportunity to build a better life, not just for themselves but to provide more for their children than they ever had. While this whakatauki (Ma¯ori saying) acknowledges the past as an anchor for our identity, my parents taught me the value of vision in providing for the future.

That vision led them to forgo welfare benefits for young families in favor of a government home-ownership scheme in the mid-1960s. It also led my father to insure his life, something unusual for a Samoan immigrant—then and now. When a car accident caused his untimely death and left my young mother to raise us on her own, his vision provided a safety net in the form of a freehold home.

As hard as life was, that foresight enabled me to be the first from either my Samoan or Ma¯ori family to earn a university degree and have opportunities neither of my parents had. As a parent, I’ve come to understand that a key part of honoring the past is building a better future.

Mō tātou, ā, mō kāuri ā muri ake nei  (For us and our children after us) 

About the author 

As Retirement Commissioner, Diane Maxwell leads the Commission for Financial Capability (previously the Retirement Commission). The Commissioner's goal is building the financial capability of New Zealanders of all ages, with an increased focus on low-income and vulnerable groups. The role also includes a three-yearly review of retirement income policies and a monitoring role for the Retirement Villages Sector.