Punting on shares
allowing your investments to grow, the better off you are.’’
Financial adviser Liz Koh said investing needed to be made simpler, and investors should be mentored into it. ‘‘I liken it to if you knew nothing about racehorses and you went to the races. How would you know what to bet on? I’m not saying it’s as risky as gambling on racehorses but it’s a similar kind of thing. At the races, you wouldn’t know one horse from another.’’
She said investors needed to know about the companies they were investing in, how they were performing, how they were run and their track record. ‘‘Unless you have that information you might as well pin the tail on the donkey.’’
She said there should be an option alongside KiwiSaver, where funds were not locked away, that could be used to make other investments.
ASB head of wealth Jonathan Beale said KiwiSaver dominated investment conversations in New Zealand.
‘‘I don’t know if people would make the link that ‘I’m in KiwiSaver, I’m investing in these companies’.’’
KiwiSaver providers often disclose their top holdings on their websites so members can see which companies they are invested in. Beale said ASB KiwiSavers could search its website to see what shares their money had bought.
Transparency
Shareholders Association chief executive Michael Midgley said the actions of listed companies sometimes put would-be investors off. He pointed to a recent capitalraising by Turners, which diluted the shareholdings of smaller investors.
Companies that did not look out for the interests of all shareholders dented efforts to raise overall confidence in the sharemarket. ‘‘There was a massive lack of clarity and transparency.’’
Anderson said many potential investors were ‘‘jargoned out’’ of the sharemarket and found it hard to understand what they were investing in.
Beale said many New Zealanders were still scarred by the memory of the 1987 sharemarket crash. But he said it was time to move on.
‘‘That was the first time New Zealand won the Rugby World Cup – that was amateur rugby back then. Things have changed. Younger people don’t have that history, maybe that might be a positive for them. They’ve all got Apple phones or Samsung and they can see how successful those companies are. That visibility of what you’re invested in is key. The [KiwiSaver] industry needs to be more focused on what it is investing in so people can see ‘oh, I own a bit of Apple’.’’
Access
Anderson said access was a significant hurdle for many young investors because they did not have the $10,000 usually required to buy into a managed fund.
Those who buy shares directly usually have to buy in minimum parcels of about $200 and pay a $30 broker’s fee.
Many financial institutions targeted a wealthy few, she said. ‘‘We need to get more New Zealanders access to options to grow their wealth.’’
Beale said younger people seemed inclined to take a DIY approach to investing in shares. New Zealand had taken longer than some countries to switch on to ETFs, he said.
‘‘Millennials in particular might not have a big amount of money at the start. But they do have time on their side and that’s their most valuable asset.’’
Sharesies founder Brooke Anderson