Relying on family for advice is contributing to high “financial fear”: report.
Media release
28 February 2024
- More than a quarter of New Zealanders (28%) feel their financial situation is out of their control.
- More than half of under-35s always or often worry about money.
- The majority of New Zealanders don’t feel confident making financial decisions until age 55.
- Just 28% of women feel confident about their financial outlook, against 44% of men.
A reliance on amateur advice from family is impacting our financial and emotional wellbeing, according to new research by Fidelity Life. More than half of New Zealanders under 35 always or often worry about money, and more than a quarter of us feel we don’t have much control over our financial situation.
Despite this, we’re continuing to go to family rather than professionals for financial advice, failing to recognise money missteps throughout our lives and ultimately taking away choices later in life.
The Advice for good: Rethinking New Zealand’s relationship with financial advice report was commissioned to explore attitudes towards financial advice and how to overcome the barriers to seeking professional guidance.
“As New Zealand’s largest locally-owned life insurer, our mission is to be here for the good of New Zealand, but the evidence shows most New Zealanders aren’t seeking financial help, either through regular financial health checks or at key life stages, until they’re nearing retirement – when it may be too late,” says Campbell Mitchell, Chief Executive of Fidelity Life.
“We embarked on our own research to understand the role of financial advice in New Zealand, who we’re getting our advice from, and how advisers could better support consumers to understand the value of advice to their financial and emotional wellbeing.”
The research showed that while 88 per cent of New Zealanders agree financial advisers are the most trustworthy source of information on our finances, just 22 per cent of us have consulted one – against 36 per cent who have sought help from family.
Almost a third (31 per cent) of those who hadn’t consulted a professional adviser said they didn’t see the relevance of advice, and 29 per cent preferred to manage their own money.
However, this go-it-alone approach doesn’t correlate with actual confidence.
Just 44% of men are feeling confident about their financial prospects, against 28% of women – a disparity that’s widened further since the election. Meanwhile, only 30 per cent of Kiwis believe they are even somewhat in control of their financial future.
“As a result of seeking amateur advice, we get stuck in the same old ways of doing things and can’t see a way forward – especially when the people we most often turn to for advice, our parents, have experienced different conditions. Baby Boomers who have achieved financial success via the traditional route of buying a home and an investment property may consider themselves financially savvy without taking into account the fact they’ve lived through one of the greatest property booms in our history, and that as the world changes, a different approach might work better today,” says Mitchell.
The findings of the report show significant opportunity for education to help build confidence and financial security sooner, especially to help the younger cohort evolve their goals and support them along the journey.
Attendees from across the finance industry at a Fidelity Life roundtable event on 22 February agreed the findings were an opportunity to build longer-term relationships with customers, by shifting perceptions of advice, especially among younger New Zealanders.
“There is an opportunity for financial advisers to evolve their advice process towards an ongoing, coaching-style relationship with clients. From a consumer perspective, often the trigger for seeking out a professional financial adviser is a single life event, such as getting married, buying a house or having kids. Great advice businesses spend time with their clients constantly clarifying and refining life goals that serve New Zealanders throughout their lives,” says Nick Hakes, Chief Executive of Financial Advice New Zealand.
Mitchell says Fidelity Life now intends to work with advisers, consumer groups, industry and government on ways to help all New Zealanders lift their financial and emotional wellbeing.
“We encourage people and organisations in and around the financial advice sector to read the Advice for good report and think about how they might contribute to a collaborative industry approach which builds awareness of the value of financial advice, helping New Zealanders avoid money missteps and reducing financial fear,” he says.
To view the Fidelity Life Advice for good report and other content, visit https://www.fidelitylife.co.nz/advice-for-good/.
