The Commission for Financial Capability’s latest quarterly Financial Capability Barometer survey has found that nearly half of Kiwis rely on their own judgement for financial advice and that under half have a life insurance policy in place.
CFFC GM Education, David Boyle, told RiskinfoNZ that there seems to be a lack of knowledge of the value of advice but added the current regulatory changes coming about for the advice industry “…will hopefully give a broader range of ways to get advice as well which I think is hugely important”.
The survey of 2000 New Zealanders aged 18 and above also found that more Kiwis feel they are not moving forward financially, with the percentage of people who felt they were ‘just treading water’ or ‘sinking’ financially increasing from 48% to 52%.
“This means that it is likely that improvements can be made around making well informed financial product choices for New Zealanders,” the report stated.
Boyle said risk advisers play an important role in being aware of their customers circumstances and helping them find the right financial products to suit their situation.
This means that it is likely that improvements can be made around making well informed financial product choices for New Zealanders.
“So it really comes back to the adviser providing the right information to get the right cover…”, said Boyle, adding people could be under-insured and over-insured when it came to life insurance.
“It’s about what you can afford realistically but also making sure you’ve got the right cover at the right time.”
The survey asked respondents who they would seek insurance advice from and 40% said they would rely on their own judgement while 43% said they would seek out an insurance advisor.
When it came to income protection insurance specifically, 80% said they had none.
Research from Asteron Life found that SMEs had low income protection cover (see: Asteron Life Research…) but the CFFC survey indicates this issue reaches beyond the SME population.
Boyle previously said that having some form of income protection is important for New Zealanders especially as around a quarter have no emergency savings to fall back on should the need arise (see: One in four New Zealanders…).
The CFFC has organised The New Zealand Financial Capability Summit 2018, which will be held on June 11-12 in Auckland.