Australians recognise the need for a long-term plan for managing their finances, but are still sceptical when it comes to seeking financial advice from professionals, according to the findings of a recent survey.
ANZ has released the details of its Adult Financial Literacy report, which found that 85% of Australians said it was important to have a long-term financial plan. However, 47% of those surveyed said they did not trust the advice of finance professionals.
According to ANZ, the use of financial advice professionals has grown slightly over the past three years, with 38% saying they had consulted a planner or adviser about their finances (up from 33% in 2008). But just 18% said they had spoken with their adviser in the past 12 months. In contrast, 32% said they had consulted their friends and family for financial advice during the same period.
The survey also asked participants to identify the main reason for choosing their current financial adviser. 28% said they acted on a recommendation from friends or family, with a further 15% saying they were referred by a financial expert.
ANZ Head of Financial Inclusion and Capability, Jane Nash, said Australians had become more conservative following the global financial crisis, and as a result savings levels have risen and people have looked to reduce debt.
“This change has resulted in a higher proportion of people feeling more in control of their financial situation, up four percentage points to 81%. Despite this, there is still a small group of people (3%) who said they are feeling out of control all of the time and 16% who said they fluctuate in and out of control,” she said.
Those likely to feel most out of control were people with household incomes of less than $65,000 with children living at home, and people with a mortgage of more than $300,000 and a household income of less than $100,000.
In relation to protecting income and employing a strategy to manage debt in adverse financial circumstances:
- 33% of those surveyed said they had life insurance, compared to the 62% who said they held private health insurance
- Life insurance was most likely to be held by men aged between 35 – 59 years old, with personal income of over $80,000 a year and who carried significant debt (ie: a mortgage of more than $300,000)
- Only 17% of those surveyed agreed strongly with the statement that they would be able to manage if they experienced a major loss of income
- Less than half of those with some kind of insurance said they were aware that if they failed in their duty of disclosure their claim could be refused
