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Greg Medcraft is chair of the corporate regulator, the Australian Securities and Investments Commission (ASIC). He is also a consumer champion, thanks to his passion for teaching Australians about their money.

We meet Greg Medcraft at his Sydney HQ. The corporate regulator who makes the biggest business names quake is passionate about how ordinary Australian families are being protected from scammers.

On the Australian Securities Exchange, shares are being ravaged thanks to a surprise fall in stocks in China. It is a sign of how much impor­tance Mr Medcraft, a former banker and father of three, places on his role as consumer watchdog that he, his deputy and the head of the website MoneySmart agree to meet the team from The Really Simple Guide to Money despite the market turmoil. MoneySmart has tens of thousand of hits a month for its tools, which power household budgets and provide general advice. It is a powerful asset to improve financial literacy in Australia. And not one that has made Mr Medcraft popular with investment institutions.

In producing this magazine, we have met with people from the major banks and financial institutions of Australia. We have concluded that few are prepared to do more than pay lip service to the idea of ensuring the consumer understands financial literacy. It is a problem Mr Medcraft is familiar with. Recently, govern­ment funding to ASIC was cut. Mr Medcraft is keen to preserve MoneySmart’s role, and it is hard to fault his sincerity about ensuring Australians are shielded from financial misconduct.

After our meeting, he agreed to answer questions by email.

You were quoted as saying you’re “shocked” that half of Australia’s investors couldn’t tell when something was too good to be true.

ASIC’s MoneySmart website has recently updated content on “Investing smarter”. We are also in the process of developing an investment risk tool, to help people better understand key concepts around investment risk such as risk and return, diversification, and the impact of advertising and promotion of particular products. The tool will ask questions about these issues to allow people to test their understanding of concepts.

How can they tell when something is “too good to be true”?

Investment scams are often so professional, slick and believable that it’s hard to tell them apart from genuine investment opportunities. The promises are typically overhyped and some encourage you to use high-risk investment strategies. To avoid being scammed, do your own research on the company and take the time to seek independent professional or legal advice.

Don’t rely only on the operator’s information to make your decision, and don’t be pressured to make a quick decision you could regret later. If you’re worried you have invested in a scam, you should report it to ASIC and/or the Australian Competition and Consumer Commission’s SCAMwatch.

Given recent failures inside banks and other institutions, do you think there is anything more we can do to ensure the integrity of the financial adviser community?

The industry needs to improve itself so investors can have trust and confidence in the sector. The financial wellbeing of clients should be at the heart of how the sector operates. Before deciding to work with any adviser, people should check the new Financial Adviser Register, which now has information on more than 24,000 advisers.

The Register will help achieve good consumer outcomes directly by assisting consumers in their choice of adviser, and this will improve as more information is added to the register. From mid-2015 the Register has contained information about an adviser’s qualifications, training and professional membership details. It will help ASIC and licensees to identify “bad apples” more quickly and reduce the problems they create.

You’ve mentioned the risks of a property bubble and “complex” products to beat low interest rates. Are there simple principles ordinary people can use to decide on where they should put their savings?

A smart investor doesn’t rely on good luck. Instead, they take the time to consider their investment goals. Then they develop a plan and choose investments that align with their needs and objectives.

What advice would you give to a couple – say, in their 20s – about to have children and considering how they can make sure they are able to bring them up, own a home and end up in a secure old age?

Talking about the changes that will happen to your family after you have a baby is really important and these conversations should include money. Some of the things to discuss should include how you want your family to function after your baby is born. For example, who is going to be the primary care-giver? Is the primary care-giver going to work? Answers to these questions will be informed by your own values and your current financial commitments.

“A smart investor doesn’t rely on good luck. They take the time to consider their investment goals.”

Do you need to change how you manage your day-to-day spending and saving? Do you need to re-evaluate your goals and priorities, including your financial ones? Should you delay major purchases or try to reduce your debt?

What tips would you give your own family about securing a sound financial future?

It’s never too early to start saving, no matter how small the amount you can put aside. Whatever your circumstances, once you start a regular savings plan you may surprise yourself with how much you can achieve once you put your mind to it. Taking charge of your money, whether you have a little or a lot, will ease money stress and make you feel more secure and in control.

The best way to take control of your finances is to do a budget. This is a simple tool that helps you understand the money going in and out of your household. A budget shows you if you are spending more or less than you can afford. It enables you to direct your money to where it matters most, so you can stay on top of bills and start putting money towards your future goals. ASIC’s MoneySmart Budget Planner is an effective tool that can assist you in working out where your money is going and where you could potentially make cutbacks to put towards your savings goal.

Lastly, it’s never too early to plan for retirement. Good retirement planning is not just about immediate living expenses, but also the potential long-term costs.

Mr Medcraft spelt out his personal investments in The Sydney Morning Herald. He rated his best investment as his houses in Paddington (inner Sydney), and his worst investment as a hedge fund in New York that lost everything in the crisis. He also described his personal philosophy: “I’m very much a glass half-full person. And I like my mother-in law’s attitude: ‘It’s better to wear out than to rust out.’”