Bridging the Investment Knowledge Gap: Insights from Money and You research

The FSC has released its latest Money & You research, reveals the impacts of the cost-of-living crisis on New Zealanders with their life and health insurance, how women are less confident than men with risk.

Our 2024 Money and You report, Managing Risk Through Challenging Times, sheds light on how well New Zealanders understand key investment concepts. Despite growing confidence in financial decision-making, the data reveals a persistent gender gap in investment confidence, particularly regarding the relationship between risk and return, diversification, and asset allocation.

Key findings include: 

• Only 44% of women rate their understanding of the relationship between risk and return as good or very good, compared to 68% of men.
• Diversification, or spreading investments to manage risk, is understood well by 67% of men but only 43% of women, despite women being better investors, and likely to seek out more information.
• The understanding of how different types of investments vary in risk and return is also lower among women (33%) compared to men (56%).
• Just 33% of women report a good grasp of asset allocation strategies, compared to 54% of men.
• While awareness of current market trends is generally low, it’s notably lower among women (36%) than men (46%).

These findings highlight an opportunity to address gaps in financial literacy, especially among women. Building confidence and understanding in areas like risk, diversification, and market trends can empower more individuals to make informed investment decisions.

Click on the image to access the 'Money & You: Managing Risk Through Challenging Times' research report.