KiwiSavers shun financial advice

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KiwiSaver investors are more likely to use family and friends than financial advisers as their main source of advice, a new study has found.

Thursday, February 16th 2012, 6:30AM

by Niko Kloeten

The research, written by Dr Claire Matthews of Massey University, also found male KiwiSaver members appear to be more tolerant of risk than female investors in the scheme.

The results are from a nationwide survey of 1000 New Zealanders aged 18-65, conducted by market research firm UMR Research.

It found that, of those in KiwiSaver, only 4% said they had joined because they had been recommended to do so by a financial adviser.

Financial advisers were the main source of information for just under 20% of KiwiSaver members, while nearly 12% of those who switched providers said they did so because a financial adviser recommended it.

"The main source of information on financial matters was reported to be family and friends. Financial advisers, banks and the internet were reported to all be used in approximately equal proportions," the report said.

"The source of information differed significantly by age. Use of financial advisers and books etc increases with age, while reliance on family and/or friends and on the internet decreases with age."

Another finding was that many members chose their bank's KiwiSaver scheme in order to keep all their financial affairs in one place.

"It appears the choice of provider is being driven by convenience, with a lack of proper analysis of the options available, and identification of the best provider and fund to meet the member's needs," the report said.

It concluded: "There appears to be a preference to take the advice of family and friends rather than of financial advisers.

"Only a few New Zealanders have joined KiwiSaver or made changes to their KiwiSaver account on the basis of a recommendation from a financial adviser.  Books and magazines , and the internet are relied on almost as much as financial advisers."

Niko Kloeten can be contacted at niko@goodreturns.co.nz

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