Kiwis Want High Returns But 70% Keep Cash Under the Mattress

A new study
by New Zealand’s Financial Markets Authority (FMA) has uncovered significant
gaps between what New Zealanders say they want from investments and how they
actually allocate their money, as financial stress continues to mount across
the country.

Kiwis Talk Big Returns, But Invest in Savings
Accounts

The
research, which surveyed 3,169 New Zealanders and conducted in-depth interviews
with 20 participants, found that while 43% of respondents prioritize high
returns when choosing investments, fewer than one in three actually hold direct
stock market investments.

New
Zealanders predominantly favor accessible, lower-risk products over potentially
higher-yielding investments. While 79% hold everyday bank accounts and 75%
maintain savings accounts, only 30% invest directly in stocks, shares, or
exchange -traded funds.

Daniel Trinder, the Executive Director of FMA’s Strategy and Design

“New
Zealanders’ stated financial goals don’t always match their investment behaviors,
or understanding of key financial concepts,” Daniel Trinder, the Executive
Director of FMA’s Strategy and Design, commented. “There is a disconnect
between their preferences and their investment choices.”

KiwiSaver,
the country’s retirement savings scheme, emerged as the most successful
investment vehicle with 72% participation across income levels. The program’s
automatic enrollment and employer contributions have made it an effective tool
for capturing savings that might not otherwise occur.

Term
deposits and Portfolio Investment Entity funds showed much lower adoption rates
at 31% and 13% respectively, despite offering potentially better returns than
standard savings accounts.

Financial Stress Reaches
Concerning Levels

One in six
New Zealanders reported feeling they are “sinking” financially, while
44% said they are merely “treading water.” Only 39% described
themselves as “swimming” or financially comfortable.

Source: FMA

The study
found clear demographic patterns in investment behavior. Younger investors
showed greater appetite for potential returns, while those aged 65 and older
demonstrated stronger preferences for guaranteed returns, often shifting from
KiwiSaver to term deposits as they approach or enter retirement.

Income
levels significantly influenced investment priorities too. Higher-income
households were more likely to seek high returns, while those earning less than
$50,000 annually prioritized certainty and immediate access to funds.

Related to New Zealand: FMA Identifies Almost 100 Fraudulent Trading Platforms, Including Saxo, IG and ATFX Clones

Trust and Advice Remain
Barriers

Despite
widespread openness to financial guidance, with 67% of respondents expressing
interest in learning how to make their money work better, significant barriers
remain. The research found that 42% of New Zealanders feel uncomfortable
discussing their financial situation with experts.

Source: FMA

“While
there is a strong interest in financial advice, many are hesitant to discuss
their personal financial circumstances with others,” added Trinder.

Trust in
financial institutions also presents challenges, with fewer than half of bank
customers reporting high trust that their institution has their financial
wellbeing in mind. Insurance companies fared worse, with only 26% of customers
expressing high trust levels.

The
research forms part of the FMA’s broader “Good Cents” initiative
examining New Zealand’s financial capability and will inform future regulatory
approaches as the authority takes on expanded responsibilities under new
conduct regulations.

A new study
by New Zealand’s Financial Markets Authority (FMA) has uncovered significant
gaps between what New Zealanders say they want from investments and how they
actually allocate their money, as financial stress continues to mount across
the country.

Kiwis Talk Big Returns, But Invest in Savings
Accounts

The
research, which surveyed 3,169 New Zealanders and conducted in-depth interviews
with 20 participants, found that while 43% of respondents prioritize high
returns when choosing investments, fewer than one in three actually hold direct
stock market investments.

New
Zealanders predominantly favor accessible, lower-risk products over potentially
higher-yielding investments. While 79% hold everyday bank accounts and 75%
maintain savings accounts, only 30% invest directly in stocks, shares, or
exchange -traded funds.

Daniel Trinder, the Executive Director of FMA’s Strategy and Design

“New
Zealanders’ stated financial goals don’t always match their investment behaviors,
or understanding of key financial concepts,” Daniel Trinder, the Executive
Director of FMA’s Strategy and Design, commented. “There is a disconnect
between their preferences and their investment choices.”

KiwiSaver,
the country’s retirement savings scheme, emerged as the most successful
investment vehicle with 72% participation across income levels. The program’s
automatic enrollment and employer contributions have made it an effective tool
for capturing savings that might not otherwise occur.

Term
deposits and Portfolio Investment Entity funds showed much lower adoption rates
at 31% and 13% respectively, despite offering potentially better returns than
standard savings accounts.

Financial Stress Reaches
Concerning Levels

One in six
New Zealanders reported feeling they are “sinking” financially, while
44% said they are merely “treading water.” Only 39% described
themselves as “swimming” or financially comfortable.

Source: FMA

The study
found clear demographic patterns in investment behavior. Younger investors
showed greater appetite for potential returns, while those aged 65 and older
demonstrated stronger preferences for guaranteed returns, often shifting from
KiwiSaver to term deposits as they approach or enter retirement.

Income
levels significantly influenced investment priorities too. Higher-income
households were more likely to seek high returns, while those earning less than
$50,000 annually prioritized certainty and immediate access to funds.

Related to New Zealand: FMA Identifies Almost 100 Fraudulent Trading Platforms, Including Saxo, IG and ATFX Clones

Trust and Advice Remain
Barriers

Despite
widespread openness to financial guidance, with 67% of respondents expressing
interest in learning how to make their money work better, significant barriers
remain. The research found that 42% of New Zealanders feel uncomfortable
discussing their financial situation with experts.

Source: FMA

“While
there is a strong interest in financial advice, many are hesitant to discuss
their personal financial circumstances with others,” added Trinder.

Trust in
financial institutions also presents challenges, with fewer than half of bank
customers reporting high trust that their institution has their financial
wellbeing in mind. Insurance companies fared worse, with only 26% of customers
expressing high trust levels.

The
research forms part of the FMA’s broader “Good Cents” initiative
examining New Zealand’s financial capability and will inform future regulatory
approaches as the authority takes on expanded responsibilities under new
conduct regulations.

This post is originally published on FINANCEMAGNATES.

  • Related Posts

    Week in Focus: CMC Markets Signals Tokenized Asset Plans, Axi Debuts Institutional Liquidity Offering

    CMC teases entry into tokenisation The tokenization wave shows no signs of slowing, and the retail brokerage industry appears to be catching the fever. This week, CMC Markets has hinted…

    “In the Last 18 Months, Brokers Have Been Moving Toward ODP Licenses,” FMAS: 25 Insights on Regulation

    At Finance Magnates Africa Summit 2025, a pointed discussion between industry legal and compliance leaders underscored a growing consensus: regulatory shortcuts may offer early gains, but they increasingly carry reputational…

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    You Missed

    Why Pip Sizes Are Different for Major and Exotic Pairs?

    • July 12, 2025
    Why Pip Sizes Are Different for Major and Exotic Pairs?

    What Is Currency Weaponization and How to Hedge Against It?

    • July 12, 2025
    What Is Currency Weaponization and How to Hedge Against It?

    What Are Forex Ghost Orders and How Do They Affect Trading?

    • July 12, 2025
    What Are Forex Ghost Orders and How Do They Affect Trading?

    Week in Focus: CMC Markets Signals Tokenized Asset Plans, Axi Debuts Institutional Liquidity Offering

    • July 12, 2025
    Week in Focus: CMC Markets Signals Tokenized Asset Plans, Axi Debuts Institutional Liquidity Offering