The link between money & mental health – NZ Herald

More kiwis need financial advice to help their well-being: experts

The mental health of many New Zealanders can be greatly improved by a simple act: receiving financial advice.

The two things don’t seem related at all, but Joe Taylor, founder and CEO of digital advice firm KiwiSaver BetterSaver, says they’re inextricably linked.

“One of the reasons I started BetterSaver was that I was working in the financial industry and I came across a lot of cases that conclusively showed me that mental health and finances were linked,” he says.

“If someone is in a secure financial position, their mental health will be better, but New Zealand has a very real mental health issue and an equally real financial literacy issue. It all goes hand in hand.”

Research from Financial Advice NZ, a professional organization for advisers, confirms that view, showing that more than half of Kiwis given investment advice (50.5 per cent) feel their mental health has benefited from receiving such advice.

Many marital or relationship disputes are triggered by arguments over money, for example, and the majority of New Zealanders (53.2 per cent) worry about money at least once a month. However, the vast majority (nearly 82 per cent) of New Zealanders have never sought the advice of professional financial advisers, according to the Financial Services Council (FSC).

Why? One reason is that they believe that financial advisors offer less value than they cost. The biggest barrier, however, is the perceived lack of wealth. According to the FSC, the vast majority of New Zealanders who do not receive advice think that advice is unaffordable or that they do not have enough wealth to justify it.

“The thing is, the people who think this aren’t necessarily wrong,” says Taylor. “Traditional advisory models have not served the majority: Historically, financial advisors have only helped the very wealthy, those with more than half a million dollars to spend.”

However, KiwiSaver has the potential to transform not just the lives of Kiwis, but the entire economy by ensuring a retired population with enough money to be active participants. That’s where, Taylor says, BetterSaver comes in.

KiwiSaver is the largest or second largest asset (after a house) most Kiwis will make, yet 82 per cent of New Zealanders have never sought or received financial advice. For many, KiwiSaver is mandatory savings, but they don’t see it as an asset that can be managed for their benefit.

“As a country, we are not taking full advantage of KiwiSaver,” says Taylor. “Most people are completely overwhelmed by the prospect of improving KiwiSaver results. They don’t know where to start. They need advice.”

BetterSaver’s digitally supported model is more scalable, allowing aid to reach many more Kiwis than a traditional, purely 1:1 model of advice: “We can match our members with the right fund for them with, for example, a 5-minute online session Test. Think of online dating for KiwiSaver providers. If you’d like to chat with a human advisor, that’s also an option.”

“Being in the right fund can make a big difference in people’s futures, and all the evidence shows that people who receive counseling not only benefit financially, but also improve their health and well-being.”

All it takes, says Taylor, is to look at the results of recent surveys by the FSC and Financial Advice NZ (FANZ):

New Zealanders who receive financial advice have, on average, 50 per cent more in their KiwiSaver fund than those who do not receive advice: $52,500 versus $34,500. They save nearly four percent more of their income than those without advice, and their investment income is similarly four percent better than those without financial advice (FSC).

FANZ research shows that advised Kiwis are twice as likely to feel at least reasonably prepared for retirement and much more likely to feel financially secure, have money set aside in an emergency, and be happy with their financial situation than non-Kiwis. advised.

Other findings:

Taylor acknowledges that the current cost of living crisis in New Zealand will also have an effect on confidence.

“A lot of people are clearly struggling to make ends meet and it’s hard to think ahead at a time like this. It’s a bewildering time for many. That’s where a trusted advisor comes in. You don’t know what you don’t know, and talking to Being an advisor doesn’t mean giving up control, it means being empowered to make better, more informed financial decisions that help you prepare for the future.”

For more information: improvesaving