The Influence of Financial Literacy on Investment Decisions in New Zealand
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Authors
Munaweera, Mahesh Sampath
Author ORCID Profiles (clickable)
Degree
Master of Applied Management
Grantor
Southern Institute of Technology
Date
2025
Supervisors
Reddy, Krishna
Type
Masters Dissertation
Ngā Upoko Tukutuku (Māori subject headings)
Keyword
Financial Literacy
Investments
Investors
New Zealand
Investments
Investors
New Zealand
ANZSRC Field of Research Code (2020)
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Abstract
Purpose: The objective of this research project is to assess the impact of financial literacy on investment decisions in New Zealand. The study examines how fundamental financial concepts-such as understanding risk and return, diversification, compound interest, and the time value of money-influence individual investors' choices, confidence, and behaviours across a range of products, including KiwiSaver, cryptocurrencies, the property market, NZX, and managed investment portfolios.
Design/methodology/Approach: Qualitative design conducting semi-structured interviews with purposively sampled individual investors from different age groups and regions. 10 participants were selected for the interviews and conducted via zoom for one hour time. Thematic analysis revealed how participants assess opportunities, manage risk, choose platforms, and diversify investments.
Findings: The research findings showed that the financial literacy of New Zealanders is at a satisfactory level. The financial literacy level is affected by financial education. Most financial professionals had higher financial literacy level compared to other professionals. However, most of them (50%) were conservative, balanced 30% and 20% aggressive investors. Finally, the results indicated there is a significant relationship between financial literacy and investment decisions. The most influencing factor that affects investment decisions is based on the level of financial education.
Originality/value: The study recommends targeted, and context-specific education links foundational concepts to real product choices; simplified, transparent disclosures from providers; and accessible decision aids that prompt risk assessments and diversification. Policymakers, education providers, and advisers should therefore coordinate initiatives that build confidence without overstating, while investors can benefit from structured reflection tools that translate knowledge into consistent behaviours. Collectively, these steps support more effective, and responsible investment decision-making in New Zealand.
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CC BY-NC Attribution-NonCommercial 4.0 International