Cost a catalyst to low financial planning uptake
Financial advice fees are the most commonly mentioned barrier to consumers taking up financial advice, according to CoreData's latest shadow shopping exercise conducted among super fund financial planning arms.
After seeing an adviser, more than half of shoppers (53.8 per cent) thought the proposed fees were too high, although before seeing one a vast majority felt advisers could improve their financial wellbeing.
CoreData's head of advice, wealth and super Kristen Turnbull said this does not seem too radical a concept, given the reported gap between what consumers are prepared to pay for advice and what advisers are charging.
"Industry research has put the cost of holistic or comprehensive advice at between $1,400 and $3,500 depending on the complexity, yet consumers often baulk at paying less than half this for financial advice," Turnbull said.
She said the main reason for lack of advice take-up wasn't, as many might have expected, the failure to articulate the value of advice.
"Although consumers baulked at the cost of advice, they were very positive about the planner's ability to financially assist them ahead of their initial meeting," Turnbull added.
Nearly nine in 10 consumers thought advisers could assist them with things like investment strategies, market development and accessing research on latest market events.
CoreData noted the pricing of financial planning firms that were shopped varied broadly, but as a general trend the annual fees increased with the size of the portfolio.
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