Consumer experience of financial providers July 2017
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. 0.25 M.E.= n x 1.96 The margin of error for overall results n=1,000 is +/-3.1%. Colmar Brunton SLIDE 2
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 899 people have an investment KiwiSaver Life insurance Other superannuation scheme 14% 37% 67% This result is consistent with both the Investor omnibus 2016 survey and the KiwiSaver statements 2016 survey results Unit trust or managed fund 7% 454 people have more than one investment Investment portfolio managed by your adviser Peer to peer lending 5% 2% 445 have one investment Equity crowdfunding Derivatives Other (please specify) I don't have any investments 1% 19% 10% Other investments include: Term deposit or bank deposit 6% Shares 5% Property 3% Savings or cash accounts 2% Bonds 1% Q1. Which of the following investments do you currently have? Base: All respondents n=1,000 Colmar Brunton SLIDE 4
Number of financial providers
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 All people with an investment (n=899) People with more than one investment (n=454) 2 or 3 providers Don t More than 5 providers know 4 or 5 providers 29% 2% 1% 3% More than 5 providers 4 or 5 providers Don t know 1% 7% 4% 30% 1 provider 65% 1 provider 2 or 3 providers 57% Q2. How many financial providers do you have for your investment[s]? Base: Respondents with investments Colmar Brunton SLIDE 6
There are some demographic differences among the people who have more than one investment, and the number of providers they have for those investments People with more than one investment (n=454) More than 5 providers Don t know 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. 4 or 5 providers 1% 7% 4% 30% 1 provider 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. 2 or 3 providers 57% (n=454) Q2. How many financial providers do you have for your investment[s]? Base: Respondents with investments Colmar Brunton SLIDE 7
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 KiwiSaver (n=667) Other superannuation scheme (n=142) Unit trust or managed fund (n=71) 23% 6% 21% 2% 22% 71% 76% 78% Life insurance (n=372) Investment portfolio (n=53) Other type of investment (n=185) 5% 6% 2% 5% 28% 67% 36% 58% 93% Yes No Don t know 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 Colmar Brunton SLIDE 9
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 They treated me fairly 17% 54% 23% 2% 3% Total agree 71% They were knowledgeable about their products and/or services 18% 51% 25% 3% 3% 69% The information was easy to understand 13% 54% 22% 6% 3% 68% They had the skills and expertise to help me the first time 18% 45% 27% 4% 4% 63% They explained the fees 12% 41% 25% 15% 4% 3% 53% They helped me understand why the product was appropriate for me 13% 39% 32% 9% 3% 4% 52% Strongly agree Agree Neither nor Disagree Strongly disagree Don't know 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 Colmar Brunton SLIDE 10
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 They treated me fairly They were knowledgeable about their products and/or services The information was easy to understand 17% 18% 13% 54% 51% 54% 25% 22% 23% 2% 3% 3% 3% 6% 3% Increasing positive investor perceptions about financial providers should focus on increasing awareness of products and services rather than a need to change negative perceptions They had the skills and expertise to help me the first time They explained the fees They helped me understand why the product was appropriate for me 18% 12% 13% 41% 39% 45% 27% 4% 4% 25% 15% 4% 3% 32% 9% 3% 4% Disagreement is highest with the statement They explained the fees. 1 in 5 investors think their provider did not do this Strongly agree Agree Neither nor Disagree Strongly disagree Don't know Colmar Brunton SLIDE 11
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 Increasing your KiwiSaver contributions 19% Investing in residential property 19% Buying shares 15% Investing more in an existing investment 11% Extending your mortgage 9% Investing in a new product 7% Buying managed funds 4% None of these 47% Q8. In the next 12 months are you considering doing any of the following? Base: Respondents with investments n=899 Colmar Brunton SLIDE 13
Appendix: Attitudes by product type (Note: Results shown for products where n>30)
KiwiSaver Total agree They treated me fairly 14% 54% 26% 2% 3% 68% They were knowledgeable about their products and/or services 15% 48% 29% 4% 3% 63% The information was easy to understand 12% 50% 25% 7% 3% 62% They had the skills and expertise to help me the first time 16% 42% 30% 5% 4% 58% They explained the fees 11% 35% 28% 18% 5% 4% 46% They helped me understand why the product was appropriate for me 13% 34% 34% 11% 4% 4% 47% Strongly agree Agree Neither nor Disagree Strongly disagree Don't know 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 Colmar Brunton SLIDE 15
Other superannuation scheme Total agree They treated me fairly 13% 51% 24% 2% 10% 64% They were knowledgeable about their products and/or services 13% 49% 30% 2% 6% 62% The information was easy to understand 10% 57% 16% 9% 7% 68% They had the skills and expertise to help me the first time 11% 54% 27% 2% 6% 65% They explained the fees 9% 40% 24% 18% 10% 49% They helped me understand why the product was appropriate for me 4% 45% 31% 9% 2% 9% 49% Strongly agree Agree Neither nor Disagree Strongly disagree Don't know 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 Colmar Brunton SLIDE 16
Unit trust or managed fund Total agree They treated me fairly 24% 43% 28% 4% 67% They were knowledgeable about their products and/or services 29% 50% 21% 79% The information was easy to understand 17% 56% 21% 3% 73% They had the skills and expertise to help me the first time 27% 31% 30% 7% 58% They explained the fees 28% 44% 8% 20% 72% They helped me understand why the product was appropriate for me 22% 22% 41% 7% 7% 44% Strongly agree Agree Neither nor Disagree Strongly disagree Don't know 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 Colmar Brunton SLIDE 17
Life Insurance Total agree They treated me fairly 12% 58% 23% 2% 4% 70% They were knowledgeable about their products and/or services 15% 57% 23% 1% 4% 72% The information was easy to understand 10% 60% 22% 4% 4% 70% They had the skills and expertise to help me the first time 15% 55% 22% 3% 2% 70% They explained the fees 12% 47% 25% 10% 2% 4% 59% They helped me understand why the product was appropriate for me 14% 46% 28% 7% 1% 4% 60% Strongly agree Agree Neither nor Disagree Strongly disagree Don't know 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 Colmar Brunton SLIDE 18
Investment portfolio Total agree They treated me fairly 34% 52% 12% 2% 86% They were knowledgeable about their products and/or services 48% 43% 7% 2% 91% The information was easy to understand 21% 51% 24% 4% 72% They had the skills and expertise to help me the first time 37% 50% 11% 87% They explained the fees 14% 57% 25% 5% 71% They helped me understand why the product was appropriate for me 27% 52% 16% 2% 2% 79% Strongly agree Agree Neither nor Disagree Strongly disagree Don't know 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 Colmar Brunton SLIDE 19
Appendix: Demographic profile
Demographic profile by gender and age KiwiSaver (n=667) Investment portfolio (n=53) Other superannuation scheme (n=142) Life insurance (n=372) Unit trust or managed fund (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% Colmar Brunton SLIDE 21
Demographic profile income and geography KiwiSaver (n=667) Investment portfolio (n=53) Other superannuation scheme (n=142) Life insurance (n=372) Unit trust or managed fund (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% Colmar Brunton SLIDE 22
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