Financial advisers doing well but need to explain fees, says survey

The FMA has completed its first survey of consumers’ experience of financial advisers’ conduct

Financial advisers doing well but need to explain fees, says survey
The FMA has completed its first survey of consumers’ experience of financial advisers’ conduct.

Generally, respondents said their financial advisers were fair and professional but there is work to be done on explaining fees and the appropriateness of products.

Nine out of ten of the 1000 people polled have an investment with around half having more than one. KiwiSaver (67%) and life insurance (37%) were the most popular followed by other superannuation schemes (14%).

Two thirds of respondents have one financial adviser while those with multiple investments tend to have two or three advisers.

“The changes that have been introduced through the FMA licensing of financial service providers put good conduct at the heart of the industry’s priorities. We have already raised industry and consumer awareness of our view of what good conduct looks like,” said Paul Gregory, FMA Director of External Communications and Investor Capability.

Most respondents said their financial adviser treated them fairly (71%), and was knowledgeable about their products and services (69%). But only 53% explained the fees and 52% helped customers understand why the products/services were appropriate for them.

Almost a fifth of consumers said they plan to increase KiwiSaver contributions, with the same planning to invest in residential property and 9% expanding their mortgage.

The survey was the first of its kind by the FMA but will now continue to offer insights into customer views of financial advisers.

“This survey is not a one-off, this will become an annual survey. We’ll share with providers what their customers are telling us about them and, where there are issues, we’ll expect to see them do better,” Mr Gregory said.