[GRTV] New report looks at ways to improve access to financial advice + VIDEO

Fidelity Life chief executive Campbell Mitchell discusses the finding of a new new report into financial advice take up and outlines things that need to change.

Friday, March 1st 2024, 9:48AM

In a newly released report Advice for good: Rethinking New Zealand’s relationship with financial advice Fidelity Life looks at attitudes towards financial advice and how to overcome the barriers to seeking professional guidance.

Generally New Zealanders see the value of financial advice take up is low.

“While 88% of New Zealanders agree financial advisers are the most trustworthy source of information on our finances, just 22% of us have consulted one – against 36% who have sought help from family.”

The research says a reliance on amateur advice from family is impacting people’s financial and emotional wellbeing,.

More than half of New Zealanders under 35 always or often worry about money, and more than a quarter felt they don’t have much control over their financial situation.

Despite this, people continue to go to family rather than professionals for financial advice says Fidelity Life chief executive Campbell Mitchell.

Almost a third (31%) of those who hadn’t consulted a professional adviser said they didn’t see the relevance of advice, and 29% preferred to manage their own money.

“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.

“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.

What next?

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.

He says it’s time to stop making regulatory changes in the advice sector.

“Further regulation risks muddying the waters.”

“The effectiveness of the new regime (Financial Services Legislation Amendment Act) will take time to evaluate. With so much change in the last few years, the advice sector has also invested as much energy adjusting as it has providing good advice to customers.

“A pause on new regulation is needed.”

Instead, the focus must be on education.

“There’s significant opportunity for the government to work alongside the industry to help build confidence and financial security sooner, especially to help the younger cohort evolve their goals, avert ‘money misteps’ and support them along the journey."

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