by Susan Edmunds
The most common concern is around KiwiSaver. We regularly hear that young people are missing out on potential returns because they are invested in conservative funds, rather than the aggressive or growth funds that their time until retirement theoretically allows them.
Often this is put down to ignorance or apathy. Young people, we're told, don't put the time and effort into finding out where there money is, or where it should be.
But in a story we published today, it has been suggested that many young people are choosing to avoid riskier investments on purpose. Not because they want to use their money in the near-term for an investment such as a first home, but because they've been spooked by their experience of the global financial crisis.
There is likely a significant group of young investors who don't really remember any signficant run of good times - since they've owned houses, or started investing, it's just been a story of decline, losses and then gradual recovery.
The same survey found that young people were not likely to seek advice from a professional adviser.
At the moment, the DIY approach seems to be paying off. But young investors will benefit over the longer term from advisers who can show them how to ride out periods of turbulence without panicking, and how to manage their risk in a way that would still get them decent returns. Of course, tapping into those young investors is key for the sustainability of many advice practices, too.
ASB says banks are getting better at offering personalised advice - (yes, this falls into the "he would say that" category) so some parts of the industry may need to work to make it clear what benefits there are to seeking independence. But other advisers say it's not worth it - higher net-worth clients seek out IFAs, and they're the ones you most want to deal with, anyway!
On the mortgage front, there was no OCR change this week but it looks virtually certain there will be an increase next time, despite plummeting low-deposit lending. And S&P giving the life insurance industry a low risk rating has been hailed as a positive move.
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