Report reveals how consumers understand regulator’s influence on markets and financial services
Property investors’ confidence in the country’s financial markets has continued to rise in the last 12 months as the sector recovers from the impacts of the COVID-19 pandemic and other factors, according to the Financial Markets Authority’s (FMA) latest data.
The FMA’s 2021 Investor Confidence Survey found that more than 70% of investors are confident in New Zealand’s financial markets, up from 66% in 2020. In addition, the proportion of people with investments remained relatively consistent at 84%.
FMA chief executive Rob Everett commented: “It’s encouraging to see that investor confidence in the regulation of New Zealand’s financial markets has remained steady at 67%, and almost two-thirds of investors continue to acknowledge the usefulness of the investment materials they receive. These are two key measures the FMA – and the industry – can always look to improve.”
The FMA 2021 Investor Confidence Survey noted that investors’ broad types of investments have not yet shifted significantly over recent surveys. However, term deposits in the last three years have dropped from 34% to 28%, while shares have jumped from 17% to 21%.
“Term deposits have tended to be the most prevalent investment product outside KiwiSaver, but in this low-interest-rate environment, with changing behaviours and preferences, individual shares are closing the gap,” Everett said. “This aligns closely with the rise of DIY, or fractional, digital share investing over the last few years, with 60% of share investors now buying shares through these platforms.”
The FMA also determined how well financial services consumers understood and acknowledged the influence of the regulator’s actions in the markets and financial services more broadly.
“The scores show there is plenty of work to do to improve general understanding of these areas, since while few people disagree about our role in promoting market integrity and fair, efficient, and transparent markets, a very large portion did not express a view,” Everett said.
The FMA’s data revealed that more Kiwis made new investments or increased existing investments in 2021 (23% in 2021, compared to 17% in 2020). However, it also noted a slight increase in those who decreased investments (9% compared to 6%), including extending a mortgage.
Of those who increased their investments, nearly half (43%) bought shares through an online investing platform.