Further research has been released confirming the value of financial advice while also highlighting the low numbers of people who seek advice.
The research, conducted by NAB and published in the latest MLC Wealth Sentiment Survey, found that of those people who had used a financial adviser in the last two years, 82% collectively rated the advice as excellent (24%), very good (27%) or good (31%).
The survey of more than 2200 Australians found that people who rated advice favourably did so as it was tailored to their specific needs, according to 50% of those who survey respondents who had used an adviser.
Just over a third of respondents who received advice gave a favourable rating because the adviser identified and understood their purposes and goals, while a third stated they gave the rating because their adviser looked at risk and ways to minimise it.
Key drivers for people seeking advice included trust in the advice, prior experience with an adviser, the advice was free and because the adviser had a good reputation with respondents mainly seeking advice on savings, investments, super, retirement and tax planning.
“…people are busy and are overwhelmed by all the financial decisions they have to make…In the end, they often don’t end up doing much at all…”
Despite these positive sentiments towards advice, NAB found that only around 20-30% of people had sought any form of financial advice in the last two years with 79% of respondents having not received any form of life insurance advice in that time.
Similar numbers were found for people seeking retirement planning advice (78%), tax planning (77%) and superannuation (73%), aligning with an industry consensus that only one in five people seek advice.
NAB Executive General Manager of Wealth Advice, Greg Miller, said the low levels of consumers seeking advice may stem from a lack of time but also a lack of understanding about what to do next.
“What we tend to see is that people are busy and are overwhelmed by all the financial decisions they have to make…In the end, they often don’t end up doing much at all, or doing what’s easiest, which may not be the best course of action,” Miller said.
The survey also found the lack of financial guidance may affect the satisfaction of respondents when it comes to their wealth with the average satisfaction rating, out of 10, for their income scoring 4.0, and their net worth scoring 4.1 and current lifestyle scored 4.7.
“The decisions we make about our money affect us every day of our lives, and they really impact our happiness, so we need those decisions to be good ones that are based on our unique circumstances and goals,” Miller, said.
