Financial advisers have been confirmed as the second most trusted source of financial advice for most Kiwis, beaten only by the bank or provider of a particular product.
“This confirmation has come today as part of latest research by the Financial Markets Authority (FMA)’” says Financial Advice New Zealand CEO Katrina Shanks.
The results of the FMA survey of Kiwis shows more than half of those surveyed (52%) trust financial advisers. This backs up independent research commissioned by Financial Advice NZ.
That research, “Trust in Advice”, which was undertaken in 2020, showed 94% of those surveyed who had used an adviser rated them as good or very good with regard to trustworthiness. 72% of those who hadn’t used an adviser agreed financial advisers were trustworthy.
Financial Advice NZ Chief Executive Katrina Shanks says both surveys show consumers across all demographics rate professional advisers very highly for their trustworthiness, good consumer outcomes, service, and results by consumers across all demographics.
The FMA survey also showed of all the advice sources people accessed, social media was the least trusted.
“The good news is social media is highlighted as the least trusted source of financial advice – appropriately so because little of the social media commentary is backed by research, fact or the competency, knowledge or skill of a professional financial adviser.
“It is a concern, however, that younger people trust social media ‘advice’ more than older people. That is something the industry needs to focus on as young people have less financial literacy.”
The FMA survey also shows only a third of people would feel confident in knowing what steps to take if they experienced unfair treatment from a financial services provider. Only 21% of those surveyed feel they are in a secure financial position, and more than half feel they are going backwards or just staying afloat. Over one third are not investing or receiving financial advice, and 25% feel nervous about speaking to financial service providers.
“These are concerning statistics, and again it’s all a matter of educating people about getting the right advice.
“From our independent research released earlier this year we know that people who obtain good financial advice will do better when it comes to savings and investments.”
That research, “Better Behaviours”, showed people who take advice from a professional tend to have financial behaviour that allows them to be more secure with comfortable futures than unadvised Kiwis.
“Regardless of income level, advised Kiwis are more prepared for retirement, feel better about their financial position and are more comfortable making big financial decisions.
“For example, more than two thirds (77%) of advised Kiwis say that advice has led to outcomes such as a better understanding of the risks of their financial plan, a better understanding of how to achieve financial goals (74%), and 70% believe they are better equipped to actually stick to these financial plans.
“Basically, they perform better across all facets of financial planning.
“They are better budgeters (94% vs 83% say they are confident making big financial decisions), they have a higher use of KiwiSaver contribution (82% vs 72%), they understand the value of reviewing and making changes to their mortgage (86% vs 68% reviewed in the past year), they have a much higher uptake of all types of insurance, and they are more likely to have investments other than KiwiSaver or property (61% vs 35%).
“Across the board, those who seek quality financial advice have more tools to think about their finances in a pro-active way and have more confidence and control, all leading to a significant positive effect on their sense of financial wellbeing.”