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The rise of the digital investor; 1.5m Kiwis use, or plan to use, micro-investing platforms

New research from the Financial Services Council (FSC) has revealed the surprising number of Kiwis using platforms like Sharesies, Hatch and Stake, why they’re using them, and what’s stopping those who haven’t yet jumped on the bandwagon.

The FSC research, The Rise of the Digital Investor, carried out by CoreData as part of the FSC’s ongoing Money and You series, provides one of the most comprehensive pictures to date of Kiwis’ views on micro-investing platforms.

“Over the past eighteen months we’ve seen the incredible rise of the digital investor, and our research has revealed that 38.2% of adult New Zealanders currently use, or plan to use, micro-investing platforms. That is about 1.5 million Kiwis and reflects a transformational shift in how we are choosing to invest our money,” says FSC CEO Richard Klipin.

“This shift is particularly noticeable among younger New Zealanders, with around 55% of Generation Y (39 years old or younger) likely to use them.

“The research shows that since early 2020 New Zealand has followed the global trend towards investing in shares, as well as more speculative assets such as cryptocurrencies. 21% of people are investing or have invested in cryptocurrencies – an increase of about 7% since March last year.

“Part of this is due to the rapid rate of tech adoption, which was turbo-charged by the pandemic. The ease of access that tech provides makes investment more appealing for people who previously didn’t really consider it as an option.

“It’s interesting to note the demographic differences; younger generations and men are more likely to use these platforms than older New Zealanders and women. Over 40% of men use or plan to use micro-investing or digital currency platforms, compared to 32% of women who use or plan to use micro-investing platforms and 20% who use or plan to use digital currency platforms.

“The research also shows over 90% of New Zealanders are using some kind of online platform for their banking, insurance and KiwiSaver, which points to a level of comfort and confidence in technology that has been around for a longer period of time.”

However, despite the popularity of new technologies, New Zealanders remain wary of security and fraud.

“Most respondents were concerned with the risk of online fraud, identity theft or scams, that could result in financial loss,” says Klipin.

“Eighty per cent are concerned about online privacy; and after a number of high-profile cyber-attacks and ransomware attacks it’s understandable and encouraging that many are wary about the privacy of their personal information and their finances when using online platforms.

“That’s why it’s crucial that the financial services industry, and the professionals who work in it, keep pace with these new ways of investing and managing personal finances, and provide the information to support considered financial decisions,” concluded Klipin.

Ryan Bessemer, CEO of Trustees Executors who supported the research, said it provided a unique insight into the ground-breaking and fundamental change that digital platforms are making to the way New Zealanders invest their money.

“Micro-investment platforms give consumers more control over their investments and will force better quality products to be available to the market. Nevertheless, given this enhanced level of control, the value of good financial knowledge and advice is more important than ever before, as we incorporate new tools and platforms into our personal financial planning.”