Launched for world financial planning day, the study of 1,001 advised and unadvised people shows close to 60% of people who use financial planners are highly satisfied with their wealth, whereas just 30% of those who don’t use financial planners feel the same way.
The study by the financial planning standards board, using an independent research company, examined the financial and non-financial impact of financial planning across quality of life, financial confidence, financial satisfaction and experienced value, while debunking myths surrounding financial planning.
It found about 90% of clients of certified financial planners (CFP) feel financially secure and a similar proportion – 80% – feel tangibly better off. Close to 90% of CFP clients said the value of financial planning outweighs the cost, while 99% said they trust their financial planner to act in their best interests.
Financial advice NZ chief executive Katrina Shanks says her organisation supported the global research as it knows financial planning makes a difference to New Zealanders’ lives and, “we wanted independent research to support this position.”
The research shows New Zealanders have less financial confidence than the global community unless advised by a CFP, in which case their confidence is higher than global results.
The Financial Planning Index in the report scored unadvised New Zealanders’ financial confidence at 57 vs 60 from global participants. In contrast, those who worked with a CFP outperformed the global CFP score: 76 v 71.
Financial planning standards board chief executive officer Dante De Gori says in the existing volatile climate, where unexpected events can send shockwaves through the global economy, the role of financial planning in general, and of CFP professionals in particular, has become even more critical in helping people make financial decisions and achieve long-term goals, while enjoying a better quality of life.
The survey included people aged 25 and over, earning more than $90,000 a year or holding more than $50,000 in investable assets.
“Financial advice unlocks benefits beyond money by improving overall mental health,” the study says. More than 44% of people who work with a CFP professional have reported financial advice positively impacted their mental health and family life. Plus, 77% generally feel they can cope well with any health issues.
Gen Y (aka millennials) is more hands-on, having greater experience with direct investing. One in five of gen Y-ers have traded directly online since 2020, with one in 10 trading before the pandemic and continuing afterwards.
Gen Y-ers have more interest in investing in novel, non-traditional asset classes, the study says. One in 5 gen Y-ers claim to currently have at least some crypto assets and one in three would consider it.
