Advisers needed by potential clients, FMA research shows

There is untapped demand for financial advice among New Zealanders, but the challenge for the industry will be to capture a market that is different from those it already serves, a new Financial Markets Authority report shows.

Thursday, July 23rd 2020, 6:22AM

Part two of its investor confidence survey showed despite the majority (60%) of investors experiencing losses as a result of Covid-19, the outlook on investing was positive.

Most Kiwis (71%) were optimistic that the pandemic would pass eventually and markets would recover with time. Nearly a quarter (23%) were planning to increase existing investments or make new investments in the year ahead.

It found 11% of people were looking for an adviser to help review their investments.

Another 11% had already been working with their advisers.

Those looking for an adviser were significantly more likely to be male – at 63% compared to 49% across all investors, with investments outside KiwiSaver, working full-time and more confident in New Zealand financial markets. Nearly 30% of those looking for an adviser were Asian – Asian people were just 17% of the survey respondents.

FMA investor capability manager Gillian Boyes said advisers would need to try to tap into other markets and find people who were not necessarily even thinking about investment advice now.

She said people were generally much more engaged and looking for information about investment and finances. “It’s an ideal time for advisers to reach out.”

The FMA and Financial Advice NZ will run an event during money week at which people will be encouraged to bring their money questions to advisers at The Base shopping mall in Hamilton.

She said the FMA had noticed a significant increase in KiwiSaver provider communications to clients during the Covid-19 market upheaval and it hoped that would continue.

In the past 12 months, 21% of KiwiSaver members made a change to their KiwiSaver. While some have increased their contributions, the biggest change was switching fund type. Twelve per cent of all KiwiSaver members switched fund in the last year, with more than one in five of these moving from growth to conservative or cash funds.

Of all KiwiSaver members who switched fund in the past year, 43% did this after Covid-19 began impacting the markets.

Overall, around half of investors made a change to their investments around or after Covid-19 and of those 78% said they were influenced by volatility.

Looking forward, around a quarter of those surveyed are planning a new investment or changing their current settings.

“There’s no doubt the current circumstances are raising real concerns for a large portion of New Zealanders, but we can still see rays of light from some of those surveyed. Half of those planning a new investment this year are considering shares which points to the new appetite for direct shares among a younger part of the population. There is even a small portion of people (about 4% of the survey) considering investing for the first time this year, or joining KiwiSaver,” Boyes said.

Tags: Financial Advice New Zealand financial advisers FMA investor confidence KiwiSaver

« Adviser stops scam: Saves client $60,000Zenith New Zealand research on hold due to Covid-19 »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

www.GoodReturns.co.nz

© Copyright 1997-2020 Tarawera Publishing Ltd. All Rights Reserved