More than 11,000 people took the KiwiSaver quiz which was created as the FMA’s contribution to the Sorted Money Week. The quiz will remain on the FMA’s website as part of its investor resources.

From that, 17% of people who took the quiz got the question “Funds with lots of shares and property have more ups and downs than funds investing mostly in cash and bonds” wrong. The answer is true.

The question which saw the highest percentage of incorrect answers was question  six: “Choosing a low risk fund means you can stop worrying about market ups and downs.” A quarter of people who took the quiz got this question incorrect. The FMA said the answer s false.

More than nine out of ten people got the other questions right.

Simone Robbers, FMA acting director of external communications and investor capability said, “It was great to see so many people who took the quiz understood the need to continue investing through any downturn and the risk of switching to a low-risk fund when markets are choppy.

“One of the things we want people to take away from the quiz is funds with lots of shares and property like growth funds will be more volatile than investments in bonds or cash, but will tend to deliver better returns over the long-term.

"Investors should also understand that even a low-risk fund is not a no-risk fund, with the value of any investment being impacted by market movements.”

A spokesman for the FMA said it showed advisers had a role to play in behing proactive in their discussions about market movements making sure clients or members are in the right type of fund for their needs before storms hit, rather than after.

“Advisers and providers can also add real value by helping their clients or members make an objective decision if they seek help during a period of major market volatility.

“The returns data we receive shows that most AFAs advise very few clients about KiwiSaver. There is a real opportunity for them to do more to support KiwiSaver members make better decisions.”

Adviser Liz Koh agreed it was important for advisers to discuss investment risks.

"I find that if clients understand these things,I don’t get phone calls in times of market volatility. One of the principal ways in which an adviser can add value is helping clients to make the right choices when there is volatility. An understanding of risk and volatility is fundamental to becoming a successful investor and advisers can teach these concepts to clients and support them through market changes."