Many Kiwis feel financially confident, but gaps remain

New research from the Financial Markets Authority (FMA) revealed that while many New Zealanders feel confident managing their finances, gaps persist between their financial goals and actual behaviours – particularly when it comes to investment choices and seeking financial advice.

The study, titled “Good Cents: Kiwis on Savings and Debt”, explored attitudes and behaviours towards saving, debt reduction, and financial guidance.

The findings come amid a fragile economic recovery, with NZIER noting that weaker demand is dampening business activity despite improved household sentiment.

Confidence vs. practice

The FMA report found that most New Zealanders feel informed and supported in managing their finances.

“New Zealand consumers feel well-informed and well-supported when it comes to managing their finances and they’re happy with their understanding and confidence around savings and debt,” FMA said.

However, the research revealed a disconnect between stated financial goals and real-life investment behaviour.

“Stated financial goals didn’t always match investment behaviours, or understanding of key financial concepts,” FMA said. “There was a disconnect between preferences and investment choices.”

While nearly half of respondents prioritised high returns, fewer reported actively investing in higher-risk, higher-return products like shares.

Advice sought—but not always comfortably

The survey also revealed that while many Kiwis value financial guidance, a significant portion feel uncomfortable discussing their finances.

“Two in three were open to receiving financial guidance, despite 42% saying they feel uncomfortable discussing their finances,” FMA said.

Despite this hesitation, New Zealanders remain optimistic.

“We found 66% of New Zealanders, regardless of financial status, are actively looking for ways to improve their financial situation,” FMA said.

Key findings from Good Cents

Other notable findings from the study include:

• One in six New Zealanders felt they were “sinking financially.”
• More than half pay off high-interest debt first, showing strategic debt management.
• Despite prioritising high returns, active investment in shares and similar products remains low.

Financial vulnerability and under-pressure communities

The survey also highlighted financial vulnerability across different age and ethnic groups. Māori, Pasifika, and those aged 18–24 and 45–54 were identified as facing more significant financial challenges.

“These findings help build a clearer picture of which communities are under the most pressure, and why,” FMA said.

This aligns with findings from FMA’s separate 2024 Consumer Confidence Survey, which revealed that Māori and women were less confident in New Zealand’s financial markets and regulation.

New regulatory phase: CoFI and CCCFA

The release of “Good Cents” coincides with the introduction of the Conduct of Financial Institutions (CoFI) regime, as well as the addition of the Credit Contracts and Consumer Finance Act (CCCFA) to the FMA’s responsibilities.

“As the Conduct of Financial Institutions (CoFI) regime comes into effect, the FMA is entering a new phase of engagement with banks and other lenders to elevate conduct standards across the sector,” FMA said.

“The addition of the Credit Contracts and Consumer Finance Act (CCCFA) to our mandate will further enhance the FMA’s role in protecting consumers.”

Read the FMA announcement and download the full report here.