Kiwis seek out expert advice

New Zealanders are opting less to seek financial advice from friends and family and turning more towards those viewed as experts in their field, the latest Mercer KiwiSaver sentiment index shows.

Friday, May 23rd 2014, 6:00AM 2 Comments

by Susan Edmunds

The index, which is designed to offer insight into working Kiwis’ attitudes towards KiwiSaver, found that more than half are still not confident their savings will give them the retirement lifestyle they want.

But it shows an increase in support, participation and confidence in knowledge of KiwiSaver.

More than half (66%) of respondents said they would primarily seek assistance from their KiwiSaver provider, up from 49% in 2012– with a shift towards seeking information from those viewed as experts in the field.

Twenty-four per cent said if they had questions about KiwiSaver, they would approach a financial adviser, up from 19% in 2012 but down from 33% in 2007.

Twelve per cent would seek advice from a family member, down from 17% in 2012 and 18% in 2007 and 2009 and 10% would turn to friends, down from 13% in 2012.

The index showed that 52% wanted to have more knowledge about KiwiSaver.

Martin Lewington, managing director of Mercer New Zealand, said the shift away from relying on family and friends for financial advice was a positive one.

He said after their providers, the second most common source of information was the employer.

The survey highlighted the role that KiwiSaver providers played in educating members about their retirement savings, he said, and suggested that people were becoming more confident about using tools provided by groups such as Sorted.

“It would suggest a move toward disintermediation of KiwiSaver. It’ a global trend of a shift of power to the consumer.”

Whether independent financial advisers would become a more common source of information would depend on clients’ circumstances and advisers’ value propositions, Lewington said.

“A fee for service is the way for advisers to go, then it’s for consumers to weigh that up, if they believe that the value proposition is worthwhile, they will pay.”

Independent advice would be most useful to clients with higher net wealth or complex needs, he said.

The key for providers in delivering advice to a large number of people was to use their networks well, he said. Lewington said they had to bring a wealth of knowledge to New Zealander sin a way that was accessible, whether that was via a digital platform, social media or personalised snail mail.

“The challenge is getting the information and making it available in a way that is cost-efficient.”

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Comments from our readers

On 23 May 2014 at 9:48 am R1 said:

I would be curious to know whether the sample used for the survey was random or from a particular cohort; e.g. Mercer client connected. I understand the sample size was 1000 individuals so what is the error in measurement? Without such info interpreting this data can be risky and wrong conclusions drawn; much like the political polls we get hammered with via the media.

On 28 May 2014 at 2:00 pm Geoff Fairburn said:

Mercer used a quantitative approach for its Mercer KiwiSaver Sentiment Index study. Data was collected via an online survey among a national random sample of 1,000 working New Zealanders aged between 18 to 65 years. An online panel was used to source eligible respondents who met this criteria. This is not a study of Mercer KiwiSaver scheme customers however, given Mercer is a KiwiSaver provider, it is plausible that some Mercer customers may have participated in the study. To ensure robustness, a sample size of 1,000 respondents was used – representing a sample variance of +/- 3.1% (at the 95% confidence level). This variance increases further as the sample size decreases (ie: a sample size of 500 respondents would have a sample variance of +/- 4.4%). Throughout our report, statistically significant differences at the 95% confidence level were tested between subgroups and reported accordingly.

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