Financial advice empowers Kiwis to think about their finances in a proactive way, says industry body
Kiwis who seek out and receive professional financial advice are more likely to have positive financial behaviours, according to Financial Advice New Zealand’s new report.
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The report, Better Behaviours – research on the value of financial advice, found that advised Kiwis, regardless of income level, are more prepared for retirement, feel better about their financial position, and are more comfortable making big financial decisions.
More than two thirds of advised Kiwis said that advice has led to better understanding of the risks of their financial plan (77%), a better understanding of how to achieve financial goals (74%), and better equipped them to stick to these financial plans (70%).
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Some 94% of advised Kiwis are more confident in making financial decisions, compared with 83% of the unadvised. Advised Kiwis were also found to have a higher rate of KiwiSaver contribution compared to their unadvised counterparts (82% vs 72%).
The survey found that advised Kiwis had a higher uptake of insurance across age and income levels, with more advised Kiwis having life insurance (59% compared to 32%) and health insurance (55% compared to 28%) than unadvised. The number of advised Kiwis who used other types of insurance such as income protection (34% to 10%) and total and permanent disability insurance (31% to 10%) was more than three times higher than the unadvised.
Beyond KiwiSaver and property, advised Kiwis were also found to more likely have other investments (61% vs 35%), indicating they have a wider diversification of investment assets than the unadvised.
Advised Kiwis understand the value of reviewing and making changes to their mortgage, with 86% of advised Kiwis with a mortgage having reviewed that mortgage in the last year, compared to only 68% of unadvised Kiwis. Some 90% believe those changes will save them money in the long term.
Advised Kiwis also plan for and expect a better retirement, with advised Kiwis across every age band saying they have a better understanding of how much money they will need in retirement (62% vs 40% overall).
“What the Better Behaviours results clearly illustrate is that advised Kiwis are more likely to have a documented budget and financial plan, review their financial products regularly, understand risk vs return, and take-up and cancel insurance products when appropriate,” Financial Advice NZ said. “They are also more likely to have positive mortgage behaviours, setting themselves up to save interest and carve years off the life of their mortgage.”
