FMA Survey Shows Changing Investor Preferences And Continuing Confidence In The Markets
Confidence in New Zealand’s financial markets has continued to rise in the last twelve months, following a significant rebound in financial market performance, while more people are shifting from term deposits to shares.
For the first time, the FMA’s 2021 Investor Confidence survey has found over 70% of investors are confident in the country’s financial markets, up from 66% in 2020.
The proportion of people with investments has remained relatively consistent at 84%. Although the broad types of investments held by investors hasn’t shifted significantly over recent surveys, in the last three years, term deposits have dwindled from 34% to 28%, while shares rose from 17% to 21%.
Rob Everett, FMA Chief Executive, said: “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. 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.”
Mr Everett said: “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.”
“We also want to know how well consumers of financial services understand and acknowledge the actions we take as a regulator can influence confidence in the markets and financial services more broadly. The scores show there is plenty of work to do 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,” Mr Everett said.
More New Zealanders made new investments or increased existing investments in 2021 (23% in 2021 compared to 17% in 2020), however there was also 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.
Download 2021 Investor Confidence survey