Confusion, not trust, the major barrier to advice
Australians are avoiding financial advice because of confusion about what a planner actually does, according to a report.
Despite media speculation that lack of trust acts as the major barrier to financial advice, the Connecting with Consumers report, published by BusinessBlades, revealed misunderstanding was the main culprit.
According to the survey, only five per cent of the 4000 respondents said they would visit a planner to set up goals or a financial plan.
"Even more alarming is that only two per cent said they would go to a financial planner for personal insurances and only 12 per cent would seek investment advice from a financial planner," Neil O'Grady, Founder and Co-Director of BusinessBlades, said.
From the cohort, a third (33 per cent) said they would prefer to manage their finances themselves, while 27 per cent thought they didn't have enough money to justify the expense. Twenty-two per cent said they would visit a planner following a specific event, such as an inheritance or redundancy payout.
"Interestingly, only nine per cent of respondents said lack of trust was the key reason for not seeking the services of a financial planner," O'Grady said.
He said that the results signal the need for planners to clearly articulate their value proposition.
"As an industry, we have to look at how people perceive what we do. We have to do more work on the scope of services offered and the benefits people are going to get out of using them. We have been talking about value propositions for years; now is the time to take action."
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
