Latest financial surveys show investor confidence has taken a hit following the Christchurch earthquake.
ASB head of private banking and wealth management Jonathan Beale spoke to Firstline this morning about the dip in confidence.
Explaining the results “in layman’s terms”, Mr Beale says the drop in confidence means fewer people think their financial investments will give a positive return in the next 12 months.
He says that in January and February at the start of the quarter, investor confidence was starting to stabilise but the earthquake had a large negative impact as people, “started to think, ‘What does this mean for me?’”
Term deposits are still New Zealand’s most popular form of investment – although the return from banks is low, Kiwi investors see term deposits as a safe option they can have confidence in.
Mr Beale says New Zealand investors “haven't been very good at diversifying, spreading their assets”, and thinks it’s time they started to invest in other areas.
“We continue this love affair with property - we now seem to be moving over to cash - so I think it's probably time we started to broaden out, and start looking at some different asset classes.”
KiwiSaver is the third most popular way for New Zealanders to invest, and Mr Beale doesn’t think the changes expected in the Budget will greatly affect its popularity.
"KiwiSaver’s been around for four years now- it seems to be ingrained in people, people are used to paying their contribution on a monthly basis.
“They talk about the tax credit being reduced, but I don't think people are joining KiwiSaver for the tax credit – they’re joining it because they’re starting to realise that they need to take ownership around their retirement savings.”
Watch the video for the full interview
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