Tue, 22 Sep 2009 9:01a.m.
The reputation of finance companies and sharebrokers has taken a king hit
Public confidence in finance companies has taken a dive, a survey shows.
Only 4 percent of the 1000 people who took part in the Raboplus financial confidence index survey said they were likely to deposit with a finance company in the next six months.
"The reputation of finance companies and sharebrokers has taken a king hit," said Mike Heath, general manager for the arm of Rabobank which commissioned the survey.
Public confidence was critical to the recovery and stability of the financial system, and banks and general insurers were given the highest rating, but finance companies were the only ones to be rated below zero on the new index.
Results from the initial six-monthly survey, which measures public attitudes toward deposit-taking institutions, financial advisors and insurance providers, were presented to finance sector representatives in Wellington today.
Mr Heath said that for the financial system, public confidence was not just important -- "it is the bedrock".
Results showed more than 60 percent of New Zealanders were less confident investing in the financial sector now than six months ago, and 46 percent say their investments are worth less than in February.
"New Zealanders are wary and trust and confidence in the financial sector has taken a battering," Mr Heath said.
The survey showed people were more likely to keep their money in a bank in the short-term, or invest in managed funds -- a choice likely to have been influenced by the uptake of KiwiSaver.
But the survey also confirmed Reserve Bank Governor Allan Bollard's concerns that people are returning to investing more in the housing market.
More than a third of New Zealanders say they were less confident investing in housing now than six months ago, but one in 10 still planned to buy property in the short-term, and 30 percent expected their financial circumstances would improve in the coming six months. Half those surveyed expected their circumstances would stay the same.
Most optimistic about their financial circumstances were people from Christchurch, with 41 percent expecting an improvement.
Confidence levels for investing in the financial sector were lowest in smaller South Island cities (70 percent) and Hamilton (68 percent).
The survey also showed least financially competent people also took the least advice, and that financial confidence among the survey participants declined in line with age but increased with an individual's income and wealth.
NZPA
