Moving planning beyond wealthy, middle-aged men
Most financial planning clients continue to be wealthier, late middle-aged males and the challenge for financial planners is finding ways to service a broader demographic.
That appears to be one of the key findings from new, comprehensive research released by Roy Morgan which has served to confirm not only the current extent of the financial planning market but also the fact that industry funds remain a substantially low account balance environment.
However it is with respect to financial planning clients that the Roy Morgan data has proved most telling, suggesting that "wealth management customers are not representative of the population" and that a bias exists towards males, the higher educated, the employed and those with higher personal and household incomes.
Indeed, the research claims that the wealth management is "highly concentrated" with the top 20 per cent accounting for 64.2 per cent of the funds, albeit that there has been a slight shift in the distribution of wealth over the past five years to lower wealth quintiles.
The Roy Morgan analysis said the profile of superannuation members largely matched that for total wealth management customers, with key differences including an underrepresentation of females and a greater proportion of people working.
It said managed fund customers (other than super) tended to be male, older, have a higher average income and education level.
Looking at the overall market, the analysis said this suggested "that there exists a need in the market for financial planning for the lower quintiles, for people who are in the wealth accumulation stage". "However, as these consumers have a lower income and fewer funds under management," it said. "Cost and how to pay for the advice would be a bigger consideration for this group compared to the more affluent."
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