In another indication of economic green shoots, almost 70 per cent of financial brokers now identify an increased appetite for saving and investing among consumers, according to a new nationwide survey of financial brokers.
The survey by PIBA, the Professional Insurance Brokers Association, which has 20 member firms in Co Westmeath and 860 nationally, shows a 28 per cent increase in such perceptions over last year.
“The main factors contributing to these rather dramatic changes in consumer behaviour are, people feeling more confident about the future and an improvement in incomes for some groups,” says Rachel Doyle, chief operations officer at the PIBA.
“Low returns on deposits is also an issue, and more than three-quarters of brokers claim consumers are moving from deposits to investments,” she added.
However, she said while a majority appreciate that deposit accounts do not deliver value in the current very low interest rate environment, “a worrying element of the survey is that there are people who still believe that deposit accounts are a good investment vehicle over the long term”.
Interest rates on deposit demand accounts are currently running at a maximum of 2 per cent compared to 2011, when some institutions were offering 4 per cent.
“Since none among us can predict the future and the financial crisis has taught us that there are no safe havens, the key message is, people need to diversify and spread their risks. Some element of risk is inevitable and people need to understand that and identify their own comfort level with regard to it. Your local financial broker will help you in identifying this and the best options to suit your particular circumstances,” she said.
She also called for financial education to become part of the school curriculum.
“The lack of financial planning has a massive negative impact on people’s wellbeing, as well as their actual finances,” she said, pointing to an independent study undertaken last year for PIBA which found that those who use a financial broker are substantially better off financially and also gain psychologically.