Almost two-thirds of New Zealand’s investors are upbeat about the state of the nation’s financial markets, as strongly performing assets and better enforcement actions are being credited with a rise in their confidence, according to the latest Financial Markets Authority (FMA) survey.
About 65 percent of respondents to the survey, which was commissioned by the FMA, were either very confident or fairly confident in the country’s financial markets. The figure is better than last year’s statistics which showed that only 56 percent were confident about investing in the local market.
The biggest increase in confidence came from people investing in a superannuation scheme (81%), while the percentage of those investing in managed funds was 80%, followed by 78% for shares investors.
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The FMA put the low confidence in the previous year down to the increased volatility in financial markets across the globe which was triggered by plenty of upheaval and uncertainty from international events such as Brexit. Another factor is that New Zealand’s financial markets have recently gone through a period of significant regulatory change and improvement with the introduction of the Financial Markets Conduct Act.
Finally, the FMA survey found that 67 percent of shares investors and 65 percent of managed funds investors were helped by material they received to make an informed decision on whether to invest. However, it was still found that half of the investors in bonds and KiwiSaver segments weren’t helped by the material when making their investment decisions.
Rob Everett, FMA Chief Executive, commented: “Since the survey started 5 years ago the portion of investors who said they were not confident has shrunk from 32% to 20%. All these scores show we are starting to see a shift in the public’s historic mistrust about markets and financial services. Investors seem to have started paying attention to the presence of regulators, as well as ripples from world events, when expressing confidence.”
He added: “Considering managed funds and KiwiSaver have similar characteristics and both are licensed managed investment schemes, there’s clearly some improvements that could help make KiwiSaver communication materials more useful for investors. Good conduct includes ensuring your customers are fully-informed about the risks and benefits of a product and they understand how market performance and costs impact the final outcome.”