Advisers have role to boost confidence

New Zealanders have a growing need for financial advice, a new report on investor confidence indicates.

Monday, February 5th 2018, 6:00AM

by Susan Edmunds

ASB has released its latest investor confidence survey, for the December quarter.

It shows confidence edging up for the first time, after disruption in the lead-up to the election.

There was a sharp increase in Canterbury confidence, up 11% to a 29% net confident reading.

Overall, confidence was at a net 20%, up from 19% last quarter.

Confidence is measured as the difference between those who feel their return on investment will get better in the year ahead and those who feel it will get worse.

Respondents still felt most confident about the returns they could get from their rental properties and own homes.

There was also a surge in confidence in savings accounts. Eleven per cent said a bank savings account would give them the best return over the next year, from 6% last quarter.

ASB wealth economist Chris Tennent-Brown said the increase in confidence, despite increased media commentary about stretched asset values, showed advice was critical.

He spent a year working in ASB’s private bank, in 2016.

“Investors need advice to explain things like ‘what does it mean if the share market is high and you’ve got 20 years to go, or if you’ve got two years to go’. Advice is a big part of demystifying that. If people think term deposits provide the best performance they probably need some guidance to some of the higher-return products.”

Tennent-Brown said the survey also showed about half of all investors did not read the investment documents they were given. Some said they were boring, or irrelevant. “People need a hand with this stuff.”

Advisers should play a role helping people get the facts they needed, he said. “Whether it’s an independent financial adviser or someone at the bank advising you on your KiwiSaver fund, there’s such a massive part that adviser can play. Wealth management is not about picking winners but planning your life.”

Tags: ASB