Little trust in planners
Financial planners have emerged relatively poorly from research conducted by major polling organisation Roy Morgan Research.
The research findings, published this month, represent a compilation of earlier work conducted by Roy Morgan but one of the most telling outcomes is that financial planners do not rate particularly highly with respect to ‘ethics’ and ‘honesty’ when compared to other professionals such as pharmacists, doctors and even accountants.
The company said that, on a comparative basis, advisers were ranked low with only 25 per cent of the population rating them as ‘very high’ or ‘high’ for ethics and honesty.
The research stated this represented an unsatisfactory rating compared to other professionals who people approached for advice such as pharmacists who warranted an 85 per cent rating, doctors who gained a 79 per cent rating, dentists who were rated at 68 per cent and accountants at 50 per cent.
The Roy Morgan analysis suggested that the low level of trust in financial planners was “probably one of the reasons that only a small proportion of consumers (around 25 per cent) use financial advisers when switching their super fund”.
Elsewhere in its findings, Roy Morgan suggests that any Government move to implement the Cooper Review’s MySuper proposal would undermine the provision of financial advice to women, younger age groups and those with lower personal incomes and lower education.
“One of the important issues that needs to be considered with this group is how they are going to access advice when, currently, only 6 per cent have obtained their super from a financial adviser/accountant,” the Roy Morgan analysis said. “According to our research, this group has a generally lower level of financial literacy.”
“With a proposed ban on commissions, it is difficult to see how the bottom 60 per cent will receive any advice on their super unless it is simply single-product advice which is likely to carry a very low fee,” it said.
“A full review or financial plan for this group is likely to be out of reach for the very people who are likely to need it,” the analysis said.
AUTHOR
Mike Taylor
Recommended for you
With a large group of advisers expecting to exit before the 2026 education deadline, an industry expert shares how these practices can best prepare themselves for sale to compete in a “buyer’s market”.
Australia has marked a decade among the best countries for retirement, according to Natixis, but with high inflation threatening their retirement goals, a third say they would get professional advice to improve their chances.
When it comes to the risks of acting as a responsible manager at an AFSL, compliance firm Holley Nethercote has shared a range of red flags that could see them facing disciplinary action from the corporate regulator.
Wealth management platform provider Netwealth has announced a partnership with FinClear to streamline trading capabilities for advisers.
