In a new report from the Financial Services Council (FSC) titled “Money and You: Investing in Volatile Times”, it has been found that there is a growing number of New Zealanders that are choosing to invest in financial products. About 4 in 5 Kiwis were found to be doing so, with 88% using digital finance tools for their transactions and monitoring of banking, insurance and KiwiSaver products.
According to the report, there has been progress in micro-investing, with 18.6% of respondents having confirmed having used micro-investing platforms while an additional 15% planning to do so in future. A majority of 65% of Kiwis were found to be making risk-based decisions to protect their wealth, while about 33% are opting for investments with higher potential returns, though coupled with higher risk.
However, there was a downward trend noted in the cryptocurrency segment, with 14% fewer Kiwis found to be investing compared to the same period last year. Interest and uptake in sustainable investing were also found to be low, with 85% of respondents indicating that they were either unaware or unsure of holding any ESG investments.
FSC chief executive, Richard Klipin, has said that while it was good news that more Kiwis were investing, there were certain trends and concerns brought out by the report that needed to be addressed. He noted that a fifth of Kiwis that do not have KiwiSaver were inclined not to invest due to a lack of confidence in the scheme or confusion about it. The report found that fewer respondents understood the relationship between risk and return compared to an earlier study done in 2021.
Klipin highlighted a need for the financial services sector to help in educating New Zealanders on good investment practices as more people joined in. He also expressed concern that there was waning interest in privacy issues and security of personal information at a time when the use of online digital tools was increasingly growing to manage finances.
Ryan Bessemer, CEO of Trustees Executors and the FSC’s research sponsor, concurred with these views and stated that financial literacy should continue to be a top priority. The survey found that respondents rated their understanding of financial concepts such as risk and return, investment approaches and strategies, and diversification lower than in the previous year’s research.
Klipin added that the increase in investing and decline in cash investments at a time when living costs were on the rise showed that Kiwis were still intent on growing their wealth through investing. He encouraged industry professionals to work harder at providing members of the public with the information they needed to make informed decisions on their financial futures.
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