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A study commissioned by the FSC found that only 18% of the 2,000 participants were seeking advice from financial advisers while 40% of participants didn’t see the benefit of getting independent advice. The study found that those that received financial advice reported their wellbeing as being higher than those that didn’t receive any financial advice, although those seeking advice were wealthier and could find greater wellbeing.

“A Financial Services Council commissioned survey found only 18 percent of Kiwis were taking advice, while 40 percent didn’t see any benefit in it.

The survey of 2,000 New Zealanders said those who did receive advice reported much higher levels of both financial and overall wellbeing.

Almost half of people who received financial advice rated their wellbeing as being high or very high, compared to less than a fifth of those who hadn’t.

This comes with the caveat that those seeking advice tend to be wealthier to begin with and may find it easier to get richer and find greater wellbeing than those with less money and not seeking advice.”

FSC CEO Richard Klipin said that main barriers to seeking financial advice was the belief of not being wealthy enough to seek advice, advice being too expensive and a lack of trust in financial advisers. 65.2% of participants felt that they weren’t wealthy enough, 62.5% said that seeking advice was too expensive, and  30% said that they didn’t trust advisers. Klipin has noted that these barriers need to be addressed by the industry.

“The main barriers to people getting advice is a perceived lack of wealth, and the affordability of advice,” Klipin said. "65.2 percent think they don’t have enough wealth or assets to warrant it, and 62.5 percent believe it’s too expensive.” 

The third barrier is a question of who to trust, as many advisers are employed by financial services firms simply pushing their products.

Almost 30 percent of survey respondents said they didn’t trust advisers and almost half of those who did see one had been referred by trusted friends or family.

“These are issues for the sector to address,” Klipin said. “How you build trust, in whatever industry, is by showing up and doing what you say you are going to do.” Click here to read more

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In other news

Strategi: Strategi Institute has launched a training course to help bridge the knowledge gaps for advisers between the old financial advice regime and the new one coming into effect on 15 March 2021.

From Goodreturns: Australian report raises alarm over life insurance’s future

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