Kiwis who act on professional financial advice are better prepared for retirement and more comfortable making big financial decisions than unadvised Kiwis, according to a new report from Financial Advice NZ.
Building on its 2020 Trust in Advice report, which showed that financial advice and advisers are trusted and highly valued, the Better Behaviours report measures the extent of positive financial behaviours demonstrated by advised Kiwis compared to those who are unadvised.
According to the report, more than two thirds of advised New Zealanders say they have:
- A better understanding of the risks of their financial plan (77%)
- A better understanding of how to achieve financial goals (74%)
- And are better equipped to actually stick to these financial plans (70%)
Katrina Shanks, CEO Financial Advice NZ says the vast majority of advised consumers say their advice relationship is meeting their needs.
“When asked whether the service provided by their adviser met their needs, a strong majority – 91% – said yes to at least some extent.
“Advised Kiwis are on track for better future outcomes by being better budgeters. With budgets and plans in place, advised consumers are more confident in making big financial decisions with 94% saying they are very or reasonably confident compared to 83% of the unadvised.”
Insurance
Almost twice as many advised Kiwis have life insurance (59% compared to 32%) and health insurance (55% compared to 28%) than unadvised. Usage of other types of insurance such as income protection and TPD insurance are more than three times higher among advised Kiwis than the unadvised (34% and 10%, 31% and 10%).
Advised Kiwis plan for and expect a better retirement. Across every age band, advised Kiwis feel they have a better understanding of how much money they will need in retirement (62% vs 40% overall).
“The Better Behaviours results clearly illustrate that advised Kiwis are more likely to have a documented budget and financial plan, to review their financial products regularly, to understand risk vs return, and to take-up and cancel insurance products when appropriate,” says Shanks.
“Across the board, quality financial advice has given Kiwis the tools to think about their finances in a pro-active way, given them more financial confidence and control, and has had a significant effect on their sense of financial wellbeing.”