Consumers do not seek advice because they do not see it as valuable or that it costs too much, according to a new academic study, which found that 84% of those who do receive financial advice had high levels of trust and satisfaction in their advisers.
The study, titled ‘Funding our future: Perceptions of the value of financial advice’, and conducted by researchers from the University of Adelaide, University of Technology Sydney and University of Western Australia, found that while non-clients of advisers often felt they did not need an adviser, around 70% of those with an adviser believed paying fees for advice was worth it.
The study also found that 80% of clients would recommend their financial planner with many reporting higher satisfaction in making financial decisions, higher satisfaction with the financial aspects of life, and peace of mind than non- clients.
While financial planners and advisers may adopt different styles in working with their clients (with these identified as Mentor, Partner, Delegate, Coach and Validator in the study), 80% of clients were happy with the service style used by their adviser or planner.
The research, which was supported by a grant from the Australian Research Council in partnership with the Financial Services Council (FSC), also found that sharing client experiences about why they value the advice may help non-clients better understand the benefits and overcome concerns around costs or relevance.
FSC Chief Executive, Sally Loane said the research provided an insight into what consumers considered as valuable in an advice relationship and confirmed the benefits of advice for those who currently receive it.
“To encourage more Australians to seek financial planning advice, we need to gain a better understanding of the value experience people get when engaging a financial planner. The research findings showing that the overwhelming majority of clients are satisfied with their financial planner goes to show there is fantastic work being done by the industry on a daily basis that goes largely unreported,” Loane said.
