Investor confidence at record high

Investor confidence is up and the chief executive of the Financial Markets Authority is confident that it is more likely to stay that way.

Monday, May 29th 2017, 6:00AM

by Susan Edmunds

The regulator's latest investor confidence survey shows that confidence has risen to 65% of all respondents, from 56% last year.

Investors are the most confident they have been since the survey started in 2013. Confidence in the effective regulation of the markets has improved to 69% from 63% last year.

FMA chief executive Rob Everett said investors seemed to have started to pay attention to the presence of regulators, although confidence increased among those who were aware of the FMA and those who were not.

Investors with a superannuation scheme – at 81%, managed funds – at 80%, and shares – at 78%, were most confident. The most confident respondents were more likely to be male and living in Auckland, with a high personal and household income.

Total confidence was still only at 40% among non-investors.

Nine out of 10 people have some form of investment – KiwiSaver is the most common, followed by almost a third with term deposits.

“Prior to 2015 confidence built quite steadily and then, with market ructions last year, it dipped. While market performance has been broadly positive this year, there’s been plenty of upheaval and uncertainty from Brexit and other international events,” Everett said.

“Despite these issues, confidence seems to have been more resilient. One of the factors influencing perceptions is likely to be the transformation of the regulation of financial service providers, completed in December 2016.”

The survey showed just over half the investors found the investment materials they received helpful. A quarter said they were not.

Everett said it was clear that those who had put effort into planning, including getting financial advice, were more confident than those who had not.

He said as KiwiSaver grew and balances became bigger, there would be more opportunities for advisers to show how they added value.  People often found investing complicated, and were not confident diversifying out of things such as term deposits would pay off in the long run, he said. “Advisers can say ‘yes it is complicated but part of what I am here to do is get you through that’.”

He said the gap between those who were confident and positive and those who were not had noticeably blown out in this year’s survey. It was hoped that would flow through to those people making investments and participating in the market. “Thinking about how they put their money to work.”

Those who were determinedly negative might never be shifted, he said.

Tags: FMA

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