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24 Aug 2025 21:56
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  •   Home > News > Business > Features > The Investor

    How would you have done in Financial Knowledge Survey?

    It’s question time. How would you have answered the following in a recent survey: “Which is generally considered to make you the most money over the next 15 to 20 years: a savings account, range of shares, range of fixed interest investments, or a cheque account?”


    If you are a regular reader of this column, I do hope you gave the correct answer, “a range of shares”.

    The good news in ANZ-Retirement Commission’s financial knowledge survey is that no respondents chose the cheque account. However, just under half chose fixed interest – down slightly from a similar 2006 survey. And 22 per cent – up from 15 per cent three years ago – answered “a savings account.”

    Not only did a mere 27 per cent choose shares, but that was down from 30 per cent in 2006. Just over a quarter of New Zealanders apparently have this basic financial knowledge.

    We can only speculate on why. Perhaps it’s because shares have performed much worse recently than three years ago. More broadly, it seems that many people never got over the 1987 share market crash.

    But, as I’ve written so many times I could do it in my sleep, we should look beyond the short term. Over ten years or more it’s rare indeed for diversified shares to perform worse than savings or cheque accounts or fixed interest, and over 15 to 20 years it’s almost unheard of. Usually over long periods a range of shares do way better.

    The only possible exception to this would be high-risk fixed interest investments. But given what’s happened to many finance companies in the last few years, I would hope New Zealanders know by now that they are too risky to be “generally considered to make you the most money.”

    If property had been an option in the survey, there would be room for debate, although shares usually outdo property too over the long term – unless we compare ungeared shares with geared property, but that’s another story.

    It’s tempting to explain the aversion to shares as general aversion to risk, especially in tough times. But let’s look at the response to another survey question, about what you would recommend to someone considering an investment advertised as having a return “well above market rates”.

    Only 46 per cent would say it was too good to be true. A shockingly high equal number would say, “Invest lightly and see how it goes before investing more heavily.”

    These findings are slightly better than in 2006. Still, given how many scams operate by giving investors high early returns to entice them to put more money in, that result is a big worry.

    I don’t want to leave the impression that the survey results were all doom and gloom. Looking beyond investing to include budgeting, saving, debt management and so on, general financial knowledge seems to have improved since 2006.

    Particularly encouraging were gains for low-income households. Others that made big gains were Pacific and Asian people, and people aged 55 to 64. The introduction of KiwiSaver, with its focus on saving for retirement, may have influenced the latter in particular.

    The survey also suggests women are catching up with men, although 34 per cent of women still have low financial knowledge compared with 28 per cent of men, while 40 per cent of women have high knowledge compared with 46 per cent of men.

    Footnote: In light of recent news, it’s interesting to see that fewer people than in 2006 think that “being offered by a well known reputable financial organisation” is a sign that an investment is not a scam.

    © 2025 Mary Holm, NZCity

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