More people using financial advisers: ASB
A survey by the ASB has found New Zealanders are now more likely to consult an adviser when looking for the best way to look after their money.
Wednesday, November 24th 2021, 6:58AM
by Eric Frykberg
And they are less likely to rely on comments from a friend or a member of their family.
This has emerged from the latest survey of KiwiSaver investors by the bank with ASB senior economist Chris Tennent-Brown saying events of the past year have seen people pay more attention to their investments.
“A large proportion of those who feel confident in understanding what they need to save for retirement say they worked this out using advice or tools from financial experts,” Tennent-Brown says.
“Those using a financial planner jumped up to 25% this quarter.”
This was up from 17% last quarter. Meanwhile, those relying on advice from a friend or a member of their family fell from 16% to 11%.
Tennent-Brown's remarks indicate people were confused at how the market responded to the first Covid lockdown. Many people expected a slowdown and were baffled when asset prices like property and shares rose steeply instead.
So they have resorted to experts to explain this fact.
“Overall, there’s an increase in the number of people who’ve sought out financial guidance. Hopefully that’s the start of a trend.”
He says many investors reacted the wrong way during the first lockdown, though they did not know it at the time.
“For many KiwiSaver members, the start of Covid-19 was their first real experience of severe market volatility and we saw a number of people switching funds when the sharemarkets were at their weakest,” Tennent-Brown says.
“KiwiSaver balances also dipped significantly at that point, however they more than recovered in the later half of last year, so those that stuck with their strategy would have seen their balances recover.”
Tennent-Brown said fewer people were panicking during the second lockdown and were sticking with their investment strategies, having seen what happened during the last lockdown.
“In times of uncertainly, people can be tempted to switch to cash and under invest, and it’s pleasing that the lockdown doesn’t seem to have triggered that response this time around.”
Tennant-Brown says the whole experience made many people far more finance-aware.
He said 38% of respondents said they knew how much money they would need for each year of retirement, up from 29% last quarter.
But on the downside, 63% said they needed to be saving more – and that number was unchanged from the last quarter.
“The best thing Kiwis can do is to talk to a financial expert or use online tools to understand how much they need to be saving, and then start working on how to get to that amount,” says Tennent-Brown.
Is this what you are seeing? Share your thoughts in our comments section.
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