Consumers want more explanation around fees and suitability of products from their financial advice providers, according to a recent survey by the Financial Markets Authority.
The survey explored consumers’ experience of providers’ conduct and forms part of the FMA’s continued focus on conduct and culture in New Zealand’s financial services sector.
The research found that overall, 63 percent of all investors surveyed said their interactions with their financial provider in the last 12 months have been very good or excellent.
However, life insurance and KiwiSaver investors rated their financial providers much lower (63%) than those with an investment portfolio or unit trust/managed fund (84%).
When it came to trust, as with the overall rating of interactions with financial providers, KiwiSaver and life insurance holders trusted their providers the least (69%).
“Explaining fees and whether a product is appropriate are the areas having the biggest impact on how consumers rate providers.”
Furthermore, only 60% of life insurance holders thought their financial advice providers explained the fees clearly and 59% said their provider helped them to understand why the investment product was appropriate for them.
FMA Director of Strategy and Risk, Simone Robbers, says the regulator intends to continue “leaning into the providers” to ensure good conduct and good customer outcomes remains front of mind.
“Explaining fees and whether a product is appropriate are the areas having the biggest impact on how consumers rate providers,” said Robbers.
“Consumers agree with us that these factors are the best sign of whether providers are putting customer interests first and demonstrating good conduct.”