Newly-advised clients outpacing client attrition
There has been a 28% increase in the amount Australians are willing to pay for financial advice, according to Investment Trends.
The research firm’s latest annual Financial Advice report found Australians had “significantly stepped up” the price they were willing to pay.
For limited advice, there had been a 28% increase and consumers were now willing to pay $770 on average.
However, this was still below advisers’ estimates of how much the advice would cost to produce at an average of $2,070.
The advice gap was widest among young adults as they had fewer complex needs and were less willing to pay for advice. This generation – those aged 18-34 years old- were also most open to digital advice as a solution.
The report also noted the number of newly-advised clients had outpaced the level of client attrition for the first time in three years.
Investment Trends research director, Dougal Guild, said he expected this would lead to more digital advice tools and superannuation funds offering advice as a way to bridge the affordability gap.
“Two in three Australians are open to using a digital advice tool to plug advice gaps, although most would prefer to use in conjunction with some form of human interaction.
“We may also start to see super funds having a larger role to play in addressing the advice gaps with a large number of members surveyed open to seeking advice from their super fund but many unaware of services available. A sizeable portion of members are also unaware of intra-fund advice solutions available as part of their memberships, presenting an opportunity for education.”
AUTHOR
Laura Dew
Recommended for you
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.
Having reset its market focus to high-net-worth advisers, Praemium’s administration solution has been selected by Bell Potter in a deal that increases the platform's funds under administration by $6 billion.
High transition rates from financial advisers have helped Netwealth’s funds under administration rise by $3.7 billion in the fourth quarter of FY25.
