Shaken Not Stirred: New Research Reveals How Kiwis Are Investing In Volatile Economic Times

The Financial Services Council’s [FSC’s] latest research report reveals how New Zealanders are investing during this economically turbulent year.

The report, titled Money and You: Investing in volatile times, is the latest in the FSC’s research series that tracks Kiwi’s attitudes to investments and their finances.

The key findings are:

1. 4 in 5 New Zealanders are investing, and the majority are heading online to manage their finances, with 88% of respondents currently using or have used online digital finance tools for banking, insurance and KiwiSaver.
2. The number of Kiwis micro-investing continues to grow with 18.6% using or have used micro-investing platforms, and 15% planning to.
3. Investing in volatile economic times means that the majority, 65% of New Zealanders, are making risk-based decisions to safeguard their wealth, in comparison to just under 33% who are choosing investments with higher potential returns, even if the risk is higher.
4. Uptake of sustainable investing is low with 85% of New Zealanders either unaware or unsure if they hold any ESG investments.
5. Cryptocurrency is trending down, with 14% fewer Kiwis investing than the same time last year.
6. Despite privacy remaining a key concern overall, there is a notable drop in the level of concern by some respondents.

FSC CEO Richard Klipin says the research comes at a time when consumers in New Zealand and around the world are facing significant economic pressures.

“Many of us are now experiencing the effects of these economic uncertainties, inflation, and the impact that rising interest rates have on our daily lives - some for the first time in our adult lives.

“While it’s good news that the majority of Kiwis are investing, the research also reflects concerns and trends that need to be addressed.

“A fifth of Kiwis that do not have KiwiSaver say it is because they have no confidence in the scheme or that they are confused; and compared with 2021, fewer respondents stated that they understand the relationship between risk and return.”

“Despite significant media and public conversation about sustainable investing, Kiwis have limited understanding or interest in ESG investments, with 85% reporting that they don’t have any, or are unsure if they do – and 21% are concerned at the risk of greenwashing.

“It’s also worrying that concern about privacy and security of personal information is trending down, despite 88% of us using online digital tools to manage our finances.

“With so many Kiwis now investing, it’s more important than ever that the wider financial services community continues to educate New Zealanders in good investment practices,” said Klipin.

“Financial literacy continues to be a top priority, with respondents rating their understanding of concepts including risk and return, diversification, and investing approaches and strategies lower than the year before,” says Ryan Bessemer, CEO of the FSC’s research sponsor Trustees Executors.

The research also revealed that KiwiSaver, shares and managed funds are all on the rise, as are the use of micro-investing platforms like Sharesies and Hatch.

“The increase in those investing and a simultaneous decrease in cash investments is a sign that despite increasing living costs, Kiwis are increasingly seeking to grow their wealth through investing,” said Klipin.

“We as an industry now need to work hard to ensure increasing number of Kiwis investing have the information they need to make informed decisions about their financial futures.”

Read the full report here.

About the research:

The research was conducted via an online survey developed and hosted by CoreData. Data was collected in April 2021 (2,035 valid complete responses) and January 2022 (2,000 valid complete responses). This data formed the basis of the analysis and this report. The samples are representative of the New Zealand consumer population in terms of age, gender and income based on the latest Stats NZ data. According to Stats NZ* in March 2021 there was an estimated resident population of 5,116,300. As this survey only included respondents aged 18 years old or over, the estimated resident population of the sample is 3,944,700. The purpose of this survey was to better understand the financial confidence and wellbeing of New Zealanders.

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