PowerPoint Presentation - Financial Markets Authority...Fieldwork was conducted from 15-22 March...

Consumer experience of financial providers July 2017

Colmar Brunton | SLIDE 2

Methodology

The FMA commissioned Colmar Brunton to carry out research among consumers to understand their experience with financial services providers. The aim of the research is to help FMA understand consumer experience of the conduct of, and communications from, financial service providers.

The research was carried out online using Colmar Brunton’s Omnijet.

Fieldwork was conducted from 15-22 March 2017.

A total of 1,000 New Zealanders took part in the research. Results are weighted by age, gender, and region to ensure the results are representative of the New Zealand population.

The margin of error for overall results n=1,000 is +/-3.1%. 0.25

𝑛 x 1.96 M.E.= √

Investments


Nine out of ten people have one of the types of investments listed. Most commonly this is a KiwiSaver account, followed by life insurance

Q1. Which of the following investments do you currently have? Base: All respondents n=1,000

10%

19%

1%

2%

5%

7%

14%

37%

67%

I don't have any investments

Other (please specify)

Derivatives

Equity crowdfunding

Peer to peer lending

Investment portfolio managed by youradviser

Unit trust or managed fund

Other superannuation scheme

Life insurance

KiwiSaver

Other investments include: Term deposit or bank deposit 6% Shares 5% Property 3% Savings or cash accounts 2% Bonds 1%

This result is consistent with both the Investor omnibus 2016 survey and the KiwiSaver statements 2016 survey results

899

people have an investment

454

people have more than one

investment

445 have one

investment

Number of financial providers


65%

29%

2% 1% 3%

Two thirds of all people with an investment have one financial provider. Among people who have more than one investment the majority have two or three providers

Q2. How many financial providers do you have for your investment[s]? Base: Respondents with investments

Don’t know

1 provider

2 or 3 providers

4 or 5 providers

More than 5 providers

30%

57%

4% 1%

7%

Don’t know

1 provider

2 or 3 providers

4 or 5 providers


All people with an investment (n=899)

People with more than one investment (n=454)


There are some demographic differences among the people who have more than one investment, and the number of providers they have for those investments…

Q2. How many financial providers do you have for your investment[s]? Base: Respondents with investments

People with more than one investment but only one provider are more likely to be aged 18-29 years old and live in the South Island outside of Canterbury. They are less likely to have a household income of $100,000 or more. People with more than one investment with 4 or 5 providers are less likely to be female, and more likely to have types of investments other than the ones we asked about.

30%

57%

4% 1%

7%

Don’t know

1 provider

2 or 3 providers

4 or 5 providers


People with more than one investment (n=454)

(n=454)

Communication from financial providers


People with an investment portfolio are significantly more likely to have received a communication from their financial provider in the last 12 months than all other investment types. People with life insurance or another type of investment are least likely to have heard from their provider

Note: Results presented for investments with n>30 investors Q5. Has your financial provider communicated to you about the performance of your product or reminded you to review your investments over the last 12 months? Base: Respondents with each type of investment

71%

23%

6%

KiwiSaver (n=667)

Yes No Don’t know

76%

21% 2%

Other superannuation scheme (n=142)

78%

22%


(n=71)

58%

36%

5%

Other type of investment

(n=185)

67%

28%

5%

Life insurance (n=372)

93%

6% 2%

Investment portfolio (n=53)


Investor perceptions about their financial provider/s are mostly positive, each statement has over 50% agreement. They are most likely to agree they were treated fairly, and least likely to agree their provider explained the fees or helped them understand why the product was appropriate

Q6. Thinking now about all the interactions and communications you have had with this financial provider in the last 12 months, including online, on the telephone, or face to face, whether you contacted them or they contacted you, please read each of the statements below, consider your interactions with the provider, and indicate how much you agree or disagree with each statement. If you have an adviser for your investments, please think about contact with your actual provider, not through your adviser. Base: Respondents with investments (excl not applicable) n≈899

13%

12%

18%

13%

18%

17%

39%

41%

45%

54%

51%

54%

32%

25%

27%

22%

25%

23%

9%

15%

4%

6%

3%

2%

3%

4%

4%

3%

4%

3%

3%

3%

They helped me understand why the product wasappropriate for me

They explained the fees

They had the skills and expertise to help me thefirst time

The information was easy to understand

They were knowledgeable about their productsand/or services

They treated me fairly

Strongly agree Agree Neither nor Disagree Strongly disagree Don't know

Total agree

71%

69%

68%

63%

53%

52%


13%

12%

18%

13%

18%

17%

39%

41%

45%

54%

51%

54%

32%

25%

27%

22%

25%

23%

9%

15%

4%

6%

3%

2%

3%

4%

4%

3%

4%

3%

3%

3%

They helped me understand why theproduct was appropriate for me


They had the skills and expertise to help methe first time


They were knowledgeable about theirproducts and/or services



In more detail…

On average a quarter of people neither agree nor disagree with a statement – quite a high response. In this context a neither/nor response is similar to

a don’t know response indicating people don’t have an opinion about their provider

Overall disagreement with the statements is low, people do not

generally have negative perceptions about their financial provider

Increasing positive investor perceptions about financial providers should focus on increasing awareness of

products and services rather than a need to change negative perceptions

Disagreement is highest with the statement ‘They explained the fees’. 1 in 5

investors think their provider did not do this

Future behaviour


Nearly half of respondents have no plans to make any of the financial changes we asked about. Those who do plan to do something are most likely to increase their KiwiSaver contributions or invest in residential property

Q8. In the next 12 months are you considering doing any of the following? Base: Respondents with investments n=899

47%

4%

7%

9%

11%

15%

19%

19%

None of these

Buying managed funds

Investing in a new product

Extending your mortgage

Investing more in an existing investment

Buying shares

Investing in residential property

Increasing your KiwiSaver contributions

Appendix: Attitudes by product type (Note: Results shown for products where n>30)


13%

11%

16%

12%

15%

14%

34%

35%

42%

50%

48%

54%

34%

28%

30%

25%

29%

26%

11%

18%

5%

7%

4%

2%

4%

5%

4%

4%

4%

3%

3%

3%








KiwiSaver

Q6. Thinking now about all the interactions and communications you have had with this financial provider in the last 12 months, including online, on the telephone, or face to face, whether you contacted them or they contacted you, please read each of the statements below, consider your interactions with the provider, and indicate how much you agree or disagree with each statement. If you have an adviser for your investments, please think about contact with your actual provider, not through your adviser. Base: Respondents with KiwiSaver (excluding not applicable) n≈443

Total agree

68%

63%

62%

58%

46%

47%


4%

9%

11%

10%

13%

13%

45%

40%

54%

57%

49%

51%

31%

24%

27%

16%

30%

24%

9%

18%

2%

9%

2%

2%

2% 9%

10%

6%

7%

6%

10%








Other superannuation scheme

Q6. Thinking now about all the interactions and communications you have had with this financial provider in the last 12 months, including online, on the telephone, or face to face, whether you contacted them or they contacted you, please read each of the statements below, consider your interactions with the provider, and indicate how much you agree or disagree with each statement. If you have an adviser for your investments, please think about contact with your actual provider, not through your adviser. Base: Respondents with an other superannuation scheme (excluding not applicable) n≈57

Total agree

64%

62%

68%

65%

49%

49%


22%

28%

27%

17%

29%

24%

22%

44%

31%

56%

50%

43%

41%

8%

30%

21%

21%

28%

7%

20%

7%

3%

7%

4%









Q6. Thinking now about all the interactions and communications you have had with this financial provider in the last 12 months, including online, on the telephone, or face to face, whether you contacted them or they contacted you, please read each of the statements below, consider your interactions with the provider, and indicate how much you agree or disagree with each statement. If you have an adviser for your investments, please think about contact with your actual provider, not through your adviser. Base: Respondents with a unit trust or managed fund (excluding not applicable) n≈30

Total agree

67%

79%

73%

58%

72%

44%


14%

12%

15%

10%

15%

12%

46%

47%

55%

60%

57%

58%

28%

25%

22%

22%

23%

23%

7%

10%

3%

4%

1%

2%

1%

2%

4%

4%

2%

4%

4%

4%








Life Insurance

Q6. Thinking now about all the interactions and communications you have had with this financial provider in the last 12 months, including online, on the telephone, or face to face, whether you contacted them or they contacted you, please read each of the statements below, consider your interactions with the provider, and indicate how much you agree or disagree with each statement. If you have an adviser for your investments, please think about contact with your actual provider, not through your adviser. Base: Respondents with life insurance (excluding not applicable) n≈171

Total agree

70%

72%

70%

70%

59%

60%


27%

14%

37%

21%

48%

34%

52%

57%

50%

51%

43%

52%

16%

25%

11%

24%

7%

12%

2%

5%

4%

2%

2%

2% They helped me understand why the product was

appropriate for me







Investment portfolio

Q6. Thinking now about all the interactions and communications you have had with this financial provider in the last 12 months, including online, on the telephone, or face to face, whether you contacted them or they contacted you, please read each of the statements below, consider your interactions with the provider, and indicate how much you agree or disagree with each statement. If you have an adviser for your investments, please think about contact with your actual provider, not through your adviser. Base: Respondents with an investment portfolio (excluding not applicable) n≈47

Total agree

86%

91%

72%

87%

71%

79%

Appendix: Demographic profile


Demographic profile by gender and age

KiwiSaver (n=667)

Investment portfolio (n=53)

Other superannuation

scheme (n=142)



(n=71)

Gender

Male 48% 47% 54% 47% 62%

Female 52% 53% 46% 53% 38%

Age

18-29 years old 27% 4% 4% 12% 15%

30-39 years old 19% 7% 11% 23% 4%

40-49 years old 21% 8% 26% 27% 17%

50-59 years old 19% 18% 31% 20% 18%

60+ years old 13% 63% 28% 18% 46%

Personal income

Up to $50K 31% 32% 16% 24% 33%

$50-$100K 36% 34% 40% 37% 34%

Over $100K 16% 17% 28% 19% 20%


Demographic profile income and geography

KiwiSaver (n=667)

Investment portfolio

(n=53)

Other superannuation

scheme (n=142)



(n=71)

Household income

Up to $50K 21% 28% 10% 12% 28%

$50-$100K 32% 18% 27% 34% 19%

Over $100K 28% 36% 47% 35% 40%

Region

Auckland 35% 30% 34% 32% 34%

Canterbury 14% 10% 8% 12% 12%

Wellington 13% 11% 11% 12% 15%

Rest of North Island 29% 39% 36% 33% 30%

Rest of South Island 10% 10% 12% 11% 10%

For further information please contact:

Kate Brazier

Colmar Brunton, a Millward Brown Company Level 9, Legal House 101 Lambton Quay

PO Box 3622 Wellington 6011

Phone (04) 913 3000 | Fax (04) 913 3001 www.colmarbrunton.co.nz

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