The results of the recent Financial Markets Authority (FMA) consumer experience survey confirm the findings of Financial Advice New Zealand’s previous research, according to the latter’s CEO.
The results of the FMA survey showed that more than half (52%) of respondents trust financial advisers. This backs up the 2020 Trust in Advice survey by Financial Advice NZ, which found that 94% of respondents who had used an adviser rated them as good or very good with regard to trustworthiness, while 72% of those who hadn’t used an adviser agreed financial advisers were trustworthy.
“This confirmation has come today as part of [the] latest research by the FMA,” said Katrina Shanks, CEO of Financial Advice NZ.
Shanks said that 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.
Financial advisers were the second most-trusted source of financial advice for New Zealanders, surpassed only by the bank or provider of a particular product.
On the opposite end, social media was the least trusted source of financial advice.
“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,” Shanks said. “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 found that only around one-third of Kiwis 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 a majority said they feel that 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,” Shanks said. “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, titled 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,” Shanks said. “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.”
