KiwiSaver and banking providers seen as fairer than insurers in new Financial Markets Authority survey which also finds drop in confidence in financial markets

KiwiSaver and banking providers treat customers more fairly than insurance providers do, according to the first consumer confidence survey out of the Financial Markets Authority (FMA).

But even though three quarters of New Zealanders believe financial service providers treat customers fairly – some more than others – confidence in New Zealand’s financial markets has fallen 11% in the past year.

FMA executive director of regulation Liam Mason said the survey had taken a “pulse” of how New Zealanders felt about KiwiSaver, investment and financial markets regulation.

“The survey results suggest that New Zealanders are reasonably confident in their interactions with, and understanding of, financial markets. However, certain groups such as women, Māori, Pacific peoples, and those of low socio-economic status are not so content and confident in how they interact with and understand financial markets,” he said.

The key statistics from the survey, compared to two years ago, found:

• 98% of New Zealanders have at least one banking product
• Savings account ownership is up across all demographics
• Credit card ownership has decreased 3% while buy-now-pay-later services are up 5% across all demographics
• 86% of New Zealanders have at least one insurance product
• Car, contents, and house insurance product ownership is up across all demographics
• 85% of New Zealanders have at least one investment product
• KiwiSaver membership is highest amongst Chinese and Pacific ethnicities at 87% and 86% respectively

Banking accessibility

The FMA said 98% of New Zealanders owning some form of banking product aligned with what the FMA knew about banking accessibility and ownership in NZ.

While there has been an overall decline in credit card ownership, buy-now pay-later (BNPL) has increased in usage, particularly for those between the ages of 18–34.

According to the survey, the most common insurance product is car insurance, reflecting the high level of car ownership in NZ, the FMA said. 

Most New Zealanders own at least one insurance product – 86% – and the average number of insurance products is 2.5 per person.

Lower income households own less insurance products and the FMA said younger New Zealanders also tend to have fewer insurance policies. 

However, compared to other age groups surveyed, those between the ages of 18–34 are more likely to own pet and health insurance.

When it comes to investments, the survey found most New Zealanders have at least one investment product. 

The average number of investments per person is just under two, including KiwiSaver. The majority of New Zealanders – 62% – aren’t planning to make changes to their investments in the next year.

KiwiSaver is the most common investment product owned by New Zealanders and KiwiSaver ownership is highest amongst Pacific and Asian groups.

Confidence in understanding KiwiSaver is “mixed” according to the FMA, but New Zealanders are largely satisfied with their KiwiSaver provider.

In the FMA’s survey, low and simple fees as well as fund performance are top of mind for people when choosing a KiwiSaver fund and ethical investment was found to be more important for women, Māori and Pacific people in the survey.

For riskier investment types like cryptocurrencies, the FMA said lower income earners, men, and Māori are more likely to own cryptocurrencies as an investment.

“These groups are also more likely to have been exposed to a cryptocurrency scam, highlighting how people seeking these kinds of investments also may be at higher risk to being exposed to an investment scam,” the survey said.

Confidence down

The survey also found confidence in NZ’s financial markets has fallen from 68% in 2023 to 57% in 2024, an 11% decrease.

Confidence in financial markets was higher for those satisfied with their personal finances and lower for those struggling to make ends meet.

People ranked banking and KiwiSaver providers as fairer than insurance providers in the survey. Banking and KiwiSaver providers each scored a 68% net fair rating while insurance providers scored 60%.

“When defining what fair means, people care most about providers being transparent and straightforward to avoid hidden surprises,” the FMA said.

Established by the Government in 2011, the FMA consolidated regulatory functions previously held across the Securities Commission, the Government Actuary, the Companies Office, and the NZX. A key purpose of the FMA at the outset was to restore retail investors' confidence after the wholesale collapse of the finance company sector and high profile share market casualties such as Feltex.

FMA chief executive Samantha Barrass said the survey would help the market watchdog see emerging trends that require its regulatory attention.

“We will be leveraging these insights to inform our regulatory approach and promote positive outcomes for all New Zealanders,” she said.

The consumer confidence survey combined key questions from the FMA’s investor confidence survey and KiwiSaver statements survey from previous years. The new survey will become an annual survey of consumers’ confidence in their financial service providers, the FMA said on Monday.

A total of 2081 people were surveyed during July and August this year.