FMA Featured

Investor Confidence Stable and Improving Over Time

FMA LogoInvestor  Confidence in New Zealand’s financial markets has remained stable over the past two years, despite volatile global markets and a focus on the culture and conduct of major financial institutions in Australia and New Zealand.

The Financial Markets Authority (FMA) today released its annual survey into the public’s attitude to financial markets.

A total 65% of investors said they were confident in New Zealand’s financial markets, in line with 66% last year.  The main reasons given for an increase in confidence in the last 12 months included a rising economy and better understanding of financial markets.

FMA Chief Executive Rob Everett said: “While investor confidence has been stable over the past two years, it’s encouraging to see that it has steadily improved since we first started the survey six years ago.”

Investor Confidence 2013-19
Investor Confidence 2013-19

“Not surprisingly, investor confidence can be impacted by factors such as market volatility or global events, so we expect to see investor confidence move around from year to year,” said Mr Everett.  “What’s more important is the longer term trend which clearly shows investor confidence on the rise.”

The survey found that more investors are receiving information about their investments, with 58% of these investors finding the information helpful.  The proportion of investors finding the materials they receive helpful has been on a steady increase since 2013.

Did the investment materials you received help you make an informed decision?
Did the investment materials you received help you make an informed decision?

A total 86% of New Zealanders aged 18 years or over have some form of investment. The most common forms of investments are KiwiSaver (66%), Term deposits (34%), Shares (17%), Managed funds (14%) and Residential property (14%).

For one-third of New Zealanders (32%), KiwiSaver is their only investment and their confidence level lags investors in other products.  Just 64% of KiwiSaver investors said they were confident in financial markets, compared with 85% of investors in managed funds or investors who had bought their own shares.

Mr Everett said this underlined the importance of continuing to improve the information provided to KiwiSaver members by their providers, as well as efforts to encourage KiwiSaver members to take a greater interest in their investment.

“Over the past few years, the FMA has worked with KiwiSaver providers to include more information on fees in KiwiSaver statements and next year the industry will begin including a forecast retirement balance for every KiwiSaver member,” said Mr Everett. 

“These are important changes that will help KiwiSaver members see how well they are tracking towards their retirement goals.”