The number of consumers engaging with financial advice has fallen by 25% over the past 10 years, but new research from Investment Trends indicates the demand for advice has doubled over the past four years.
The research group has released its 2017 Financial Advice Report which found that currently there are 2.2 million active advice clients across Australia, a 25% decrease from 3 million active advice clients in 2007.
It also represents a decline in the long held figure that 20% of Australians seek advice with the new figures being closer to 12% to 15% of Australians old enough to seek advice, according to ABS data, actually doing so.
Investment Trends Senior Analyst, King Loong Choi said advisers were on average losing three clients for every two they gained but, conversely, satisfaction levels with advice had reached an historical high as advisers took steps to address client retention through better services.
According to Investment Trends, 55% of advice clients rated their overall satisfaction with their adviser as ‘very satisfied’, up from 45% in 2016.
Choi said demand for advice would continue to grow over the next two years and that “…half of Australian adults say there are areas where they would like to be receiving financial advice but currently aren’t, and this proportion has been on the rise since 2014”.
…currently there are 2.2 million active advice clients across Australia, a 25% decrease from 3 million in 2007…
The research conducted by Investment Trends estimates that 3 million Australians intend to seek financial advice from a professional adviser in the next two year, an increase from 2.6 million in 2016 and double the number of people observed in 2013.
“A growing number of individuals with unmet advice needs is fuelling growth in demand for financial advice,” Choi said, adding, “the top unmet advice needs of everyday Australians centre around retirement planning and budgeting”.
Despite this demand, Investment Trends also found a gap between what consumers are willing to pay for advice which was $750, on average, compared to the $2500, on average that advisers were estimated as cost of delivering advice.
Choi said options were available to advisers and licensees to close this cost gap and “…the majority of potential planner clients are open to a range of cost-saving options, ranging from filling in an online fact-find prior to initial consultation to non face-to-face review meetings”.
“In fact, over nine in ten potential planner clients are open to conducting review meetings with someone other than their planner if it meant a reduction in fees,” Choi said.
The Investment Trends Financial Advice Report, now in its tenth year, examines the appetite and use of financial advice among Australian adults and surveyed 9,552 people in July 2017.
Congratulations to the regulators for making sure less and less people get advice
In the eyes of the general public, our industry and its advisers are still along way from the professions it acknowledges – solicitors, medicos, engineers etc. So it’s no surprise that the above research has uncovered this.
That said, it seems to me that the government’s incessant incursions in the financial services industry won’t help here. It might clear out a few rogue advisers, but it won’t add one whit to our sought-after professionalism in the eyes of our clients and prospective ones.
In the eyes of the general public, our industry and its advisers are still
a long way from the professions it acknowledges – solicitors, medicos,
engineers etc. It’s no surprise then that the above research has uncovered
this.
That said, it seems to me that the government’s incessant
incursions into the financial services industry hasn’t helped. It might
clear out a few rogue advisers, but it won’t add one whit to our
sought-after professionalism in the eyes of our clients and prospective
ones.
And the gov’ts ever increasing red tape just means that gap between what consumers expect to pay ($750) and what an Adviser would charge only gets bigger!
It’s always bad news as far as the general public are concerned within the financial services industry When was the last time something positive was given a headline ??
Ok a 400 point rise in the all ords index is not exactly exciting compared to 58,000 transactions that where not advised to the correct authority but I have a least 3 stories I can tell of clients that would be in all sorts of problems if they did not have TPD or Income protection in place and unfortunately a few who would have no home without their late partners life cover they were responsible enough to realise they needed for the sake of their families
How about some articles that show the positive side of financial advice
Surely something positive would help in the slide of advice and people getting bad advice that only leads to more social security and under insurance issues for our country
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