RaboPlus Financial Confidence Index

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The RaboPlus Financial Confidence IndexPublic Confidence in the Financial System
September 2009

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While few people have investments that have increased in value in the past six month period, there is a feeling of optimism looking forward. Housing is still viewed with more confidence as an investment option than the financial system.
Consumer confidence with investing in the financial sector has a net negative 56 score.
Investing in housing is not viewed as negatively.
A net 10% expect their financial circumstances to improve over the coming six month period.
People who have fared better financially in the past 6 months rate the various institutions included in the study more positively than others.
A higher percentage of men are more optimistic about their circumstances in the next 6 months.
Investing in New Zealand
Investment: worth more worth the same worth less
Circumstances: will improve will stay the same will get worse
Confidence: more about the same less

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Clearly the institutions consumers have the least confidence in are finance companies. It also seems that relative to insurance companies and banks, advisors have borne the brunt of the blame for financial crisis with share brokers relatively poorly perceived
Confidence in New Zealand Financial System(1)
Deposit Takers
Insurers
Investment Managers and Advisors
Note: (1) Index score calculated as shown on p. 11

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When we compare current to non-customers of the various institutions there are significant gaps in perceptions. Without exception, non-customers have less confidence that current customers.
Confidence in New Zealand Financial System: Comparing Customers to Non-Customers(1)
Deposit Takers
Insurers
BASE: Customers/Non-customers Banks: 999/1; Finance Companies 403/597; Credit Unions 205/795; Fund Managers 449/551; Share Broker 149/851;
Financial Advisor 246/754; Life Insurance 607/393; General Insurance 878/122; Health Insurance 399/601
Note: (1) Index score calculated as shown on p.11

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A strong correlation is evident between perceptions people have of their various financial service providers and the likelihood of recommending their provider.
Perceptions of Current Relationship and Likelihood of Recommending
Deposit Takers
Insurers
BASE: Customers: Banks: 999; Finance Companies 403; Credit Unions 205; Fund Managers 449; Share Broker 149; Financial Advisor 246; Life Insurance 607; General Insurance 878; Health Insurance 399

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People with more confidence in their own expertise appear to have done better with their investments, are more likely to use various financial advisors, and be more positive about the future.
Self Rated Financial Expertise
BASE: N=1,000. People were asked to rate their own expertise with respect to choosing financial products and investments into one of ‘Expert’, ‘Competent’, ‘Some Knowledge’ and ‘Novice’ categories

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And we can see most people have an opinion about what they will invest in going forward
Likelihood of Investing in the Next Six Months
BASE: 1,000

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Deposit-Taking Institutions

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Banks

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New Zealander on the whole feel confident in their banks and feel that they have financial strength. Banks are also well rated on providing good products and services although there are clearly feelings of negativity towards their fairness and integrity .
Perceptions of Banks – Amongst all New Zealanders
BASE: 1,000

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Finance Companies

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New Zealanders lack confidence in finance companies currently with over half not confident their money would be safe. There is clearly a lack of trust too, with over half disagreeing that finance companies act with integrity.
Perceptions of Finance Companies – Amongst All New Zealanders
BASE: 1,000

13
Credit Unions and Building Societies

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Credit Unions and Building Societies are not as well known as banks or finance companies with around 20% not able to comment. However, those that can are generally more positive than negative in attitude.
Perceptions of Credit Unions & Building Societies – Amongst All New Zealanders
BASE: 1,000

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There is high confidence in Banks amongst New Zealanders with moderate levels for Credit Unions and Building Societies. However, confidence is generally low for Finance Companies.
Perceptions Amongst All New Zealanders
BASE: Includes “Don’t Know” ratings

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Fund Managers

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Feelings are somewhat mixed towards Fund Managers although in the main more positive than negative. The worst aspect is confidence in the advice they provide.
Perceptions of Fund Managers – Amongst All New Zealanders
BASE: 1,000

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Share Brokers

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Many New Zealanders are not able to comment on Share Brokers, probably reflecting the relatively small proportion of New Zealanders who participate in the share market. However, amongst those who can attitudes are polarised.
Perceptions of Share Brokers – Amongst All New Zealanders
BASE: 1,000

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Financial Advisors

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Attitudes towards Financial Advisors are more positive than negativealthough there is a significant portion who have no opinion.
Perceptions of Finance Advisors – Amongst All New Zealanders
BASE: 1,000

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Amongst all New Zealanders confidence is higher for Financial Advisors and Fund Managers than for Share Brokers. Given the poor performance of Finance Companies this is an interesting finding.

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Insurance

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Life Insurance Providers

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New Zealanders are relatively confident that Life Insurance providers will honour valid claims and that they have the financial strength to do so
Perceptions of Life Insurance Providers – Amongst All New Zealanders
BASE: 1,000

House, Contents and Car Insurers
62

General insurance companies are well rated by New Zealanders with two thirds confident that valid claims will be honoured.
Perceptions of House, Contents and Car Insurers – Amongst All New Zealanders
BASE: 1,000
63

Health Insurance Providers
68

New Zealanders are fairly confident in their Health Insurance providers although many are unable to provide an opinion.
Perceptions of Health Insurance Providers – Amongst All New Zealanders
BASE: 1,000
69

Confidence is highest that claims will be honoured for General Insurance companies followed by Life Insurance providers. Results at a total New Zealand level for Health Insurance providers reflect that many New Zealanders are unable to rate them.
75

Appendix 1: Regional Charts
98

Worth the same as 6 months ago
Worth more now
Worth less now
Compared with 6 months ago, how have your financial investments fared?
BASE: xxxx
119

About the same
More Confident
Less Confident
Compared to 6 months ago, how confident do you feel about investing in housing?
BASE: xxxx
120

About the same
More Confident
Less Confident
Compared to 6 months ago, how confident do you feel about investing in the financial sector?
BASE: xxxx
121

Will stay about the same
Will improve
Will get worse
Overall, how do you think your own financial circumstances will fare in the next 6 months?
BASE: xxxx
122

Likelihood of Investing in Next 6 Months
100

RaboPlus Financial Confidence Index

by Bernard Hickey on Sep 22, 2009

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