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.
AUTHOR
Malavika Santhebennur
Recommended for you
Determinations by the FSCP since the start of 2025 are almost double the number in the same period of 2024, with non-concessional contribution cap errors and incorrect advice among the issues.
Whether received via human or digital means, financial advice is reportedly leading to lower stress and more confidence, according to Vanguard.
The new financial year has got off to a strong start in adviser gains, helped by new entrants, after heavy losses sustained in June.
Michael McCorry, chief investment officer at BlackRock Australia, has detailed how investors are reconsidering their 60/40 portfolios as macro uncertainty highlight the benefits of liquid alternatives.
