Financial literacy vital before getting advice


Consumers should equip themselves with basic financial literacy and knowledge before they walk into a financial planner's office, general manager of an online financial education website said.
Fiona Parker from Wealth Know How is concerned over consumers' lack of knowledge on financial issues, citing superannuation and insurance as an example.
"We would like to see planners rise above the level of just being a dictionary for people and actually really doing what their core skills are," Parker said.
"The more educated the consumer is, the better conversations and advice they will have out of the financial planner because they will then be able to bring their skills to the fore about investment strategy and refine the plan consumers already have."
Consumers dealing with their insurance issues are uncertain of what the mix is, and can be either over-insured or under-insured.
"I think it's just that people don't know where to look. They're not educated in their wealth creation and financial advice space.
"Financial planners are generally well-educated people. If they're doing the basic level of trying to bring consumer education to the baseline, they're not doing as much of a service of what they can do when they can also talk about investment advice," Parker said.
Consumers should brush up on the basics of things like testamentary trusts, estate planning, building a share portfolio, diversification and so on so they can ask informed questions to their financial adviser.
"I think they've been beaten up in the media quite a bit in the past couple of years. Their core skills do really come down to the fact that as far as their investment strategies go, they have more education on that than your average guy out there," Parker said.
Recommended for you
Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions in the final quarter having a positive effect for two licensees.
A $3.5 million settlement for victims of Melissa Caddick has been approved by the Federal Court following an initial agreement last December.
The Reserve Bank of Australia has delivered its first rate decision since the introduction of a new board structure last month.
Digital advice provider Otivo has launched an interactive tool, powered by artificial intelligence and Otivo’s own advice engine, to help answer client questions.