In the next episode of ASB's Investment Insight Series we look at the current investment environment.
Most people are not confident making financial decisions, a scenario that can lead to them hoarding cash in their bank accounts and underinvesting, a leading investment expert believes.
Chantal Giles, Head of iShares Wealth for global investment management firm BlackRock says people are far more confident saving than investing and prefer things like term deposits over managed funds.
"Cash is also often held as a security or safety blanket meaning there's too much cash on the side lines and what we see is in stressful times, people go back to that safety blanket of cash," she says. "But advisers can help educate clients and show them that time in the market, in a well-diversified portfolio, is far better than sitting on the sidelines."
Giles made the comments in conversation with Chris Tennent-Brown, ASB Wealth's Senior Economist. BlackRock, one of the world's largest investment managers, is partnering with the ASB to help the bank with its investment portfolios.
She says while people doing their own investing without seeking financial advice is one of the biggest barriers to achieving decent returns, it's not just a Kiwi thing.
"Our global research shows people all around the world have complex and unique relationships with money. It is seen as taboo and finances are the leading cause of stress in people's lives.
"Many people are not where they want or need to be so advisors can help guide the conversation with clients and make them feel much more in control about their finances," she says. "Having a plan in place alleviates the stress."
Giles says people are looking for technology to add a layer of trust in their personal interactions when talking about money.
"People want investment information they can trust and technology plays a role in that, particularly around transparency because people really want to understand where their money's invested. A financial advisor's role is to complement technology and guide people through their options."
The balance of addressing today's needs and wants with saving for the future is more complex than ever and Giles says most people don't think they're on track to reach the retirement they want.
"Advisors can provide clients with a service model that's going to be aligned to their needs today and in the future."
Tennent-Brown says with a personal approach and a range of long-term investment choices, the ASB Wealth Advisory team can help investors enjoy their lifestyle today and maximise their wealth for tomorrow.
- ASB have KiwiSaver specialists who offer free advice to help you maximise your KiwiSaver savings. To find out more visit: asb.co.nz/kiwisaver-advice.
- ASB also offer a personalised investment planning service to help achieve your future goals. For more information see: asb.co.nz/investment-advice.
- These are entirely ASB's own views, not investment advice. However, there are plenty of experts at ASB who are qualified to provide personalised advice.
See ASB's Advice Disclosure Statement for more information.
Click here to read more in this series.