New Zealanders who seek financial advice generally report being in a significantly better financial position compared to those who don’t, according to data gathered by financial literacy organisation Money & You.
In research commissioned by the Financial Services Council (FSC), Money & You found that New Zealanders who receive financial advice end up with around 50% more money in their KiwiSaver, 3.7% more in savings and more financial stability - results which FSC CEO Richard Klipin says are “alarmingly excellent,” and give advisers a strong springboard when it comes to pitching their value.
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“Money & You showcased the fact that New Zealanders are in pretty poor financial shape, however there’s an underlying optimism that makes them think they’re in a better position than they actually are,” Klipin commented.
“People tend to seek advice when something is happening in their lives, so from a product and marketing perspective, that opens the door to the sector to really think about how we can tap into that in a more meaningful way.”
According to the research, the main triggers for financial advice are clients coming into some kind of money or inheritance, being in financial distress, or going through a divorce or a lifestyle change, buying and selling property, and approaching retirement. Klipin says it is also important to emphasise the “non-financial” benefits of advice, and the “peace of mind” factor can be huge in discussions around savings, insurance and finances.
“There’s the question of non-financial benefits of money,” Klipin said.
“For people who have a sense of control, goal achievement and of doing what they want to do from an early age, understanding the language of money, etc. really impacts people’s wellbeing. I think that “sleep at night” factor is huge when we’re talking about money, and you can see that in the stress and mental health data.”
“When people use words like ‘transformed my life,’ or ‘it’s helped me achieve my financial goals, it’s given me peace of mind,’ - these are hugely powerful,” he added.
“This is the voice of New Zealanders relaying back to us what’s important, and there’s a lot of value in unpacking these things and figuring out where to go from there.”