Less than a fifth of Australians use financial planning services
Australians continue to be hesitant about seeking financial advice, with over 16.8 million Australians opting to make their own decisions, according to research.
A national survey of over 1,000 people by Finder revealed just 16% of Australians had a financial adviser or planner.
On average, Australians were prepared to pay just over $1,100 for financial advice while men were more likely to seek financial advice (18%) than women (13%).
The top reasons cited by Australians were managing their own money, followed by advice being too expensive.
“Cost is a key issue for two in five Australians who aren’t currently receiving financial advice,” noted Kylie Purcell, investing expert at Finder.
“The reality is that the majority of Australians aren’t prepared to pay anything for financial advice. Even those that are willing to fork out for it don’t want to spend a lot.”
A third of respondents also said their net worth was too low to warrant the expense of a financial adviser.
However, Purcell pointed out that these services were not just for the wealthy. Some of the ways that financial planning could be useful included identifying and mapping financial goals, active management of investment portfolio(s), and applying for important financial products like income protection insurance, life insurance, and superannuation.
“Many advisers offer the first consultation for free so it’s a good opportunity to shop around and find one that you’re comfortable with,” Purcell stated.
“Just make sure to always read the financial services guide (FSG) because this tells you what fees they’re charging and whether they have any ties to products they may be offering.”
Robo-advisers are another option that can be utilised, she added.
“Although you don't get the same level of personal advice, robo-advisers can be a good alternative for those that can’t afford to see a financial adviser. With a robo-adviser you typically fill in a questionnaire and are then recommended an investment fund that suits your risk profile and investment goals.”
However, Finder found that one in five Australians maintained a distrust of financial advisers, especially after the 2019 report from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
“Luckily, a lot of positive changes have been made since then, including the banning of commissions from most investment product recommendations and greater transparency around how fees are charged,” Purcell said.
AUTHOR
Rhea Nath
Recommended for you
ASIC has banned a Queensland adviser from providing financial services for five years after failing to provide appropriate advice that was in the best interest of his clients.
Minister for Financial Services, Stephen Jones, has said it is not a “backdoor attempt” by the government to allow the new class of adviser to provide full advice.
The financial advice industry has seen a net loss after 10 consecutive weeks of net growth in adviser numbers, according to Wealth Data.
Only 11 per cent of financial advice practices have said they are including crypto products on their approved products lists, according to CoreData.
