Recognition of the value of professional financial advice has increased over the past 12 months, with trust in financial advisers at an all time high, according to the FAAA Value of Advice Consumer Research study and its Value of Advice Index.
The FAAA also states that:
- 94% of clients trust their adviser to act in their best interests
- 93% say their adviser has helped them manage financial risks in their life
- Nine out of 10 advised clients say benefits of advice outweigh the costs
The association says the index* compares responses from those who do not work with a financial adviser with those who do, as well as those who work with Certified Financial Planner, across four key metrics – quality of life, financial confidence, financial satisfaction, and their experience with their adviser.
It states that over the past year, more Australians say financial advice has improved their situation in those four areas, while unadvised Australians, whose situation is largely unchanged, continue to lag in all areas.
Ahead of World Financial Planning Day on 9 October, David Sharpe chair of the FAAA, says the results show measurable differences between those who navigate their financial journey alone and those who work with a financial adviser.
“It is well understood that financial wellbeing is connected with overall health and wellbeing. The FAAA Value of Advice Consumer Research study makes clear the link between getting quality financial advice and having better quality of life and less financial stress,” he says.
…it is fantastic to see that those who work with a financial adviser feel more financially secure and able to face current challenges…
Sharpe says the study was undertaken at a time when many people are experiencing cost of living pressures.“In this environment, it is fantastic to see that those who work with a financial adviser feel more financially secure and able to face current challenges.”
According to the Value of Advice study, over four in five of those who use a financial adviser are confident of solving most challenges, and nine in 10 feel financially secure and that their finances are tangibly better off.
In addition:
- 80% are less worried about money since receiving financial advice
- 83% feel they cope better when faced with health issues
- 49% say financial advice has positively impacted their family life
The FAAA says that when asked how a financial adviser helped them, the top three responses were:
- Building a realistic plan for a comfortable retirement
- Help to get the most out of a current financial situation
- Reducing financial stress and worries
The association adds that the improvement in the Value of Advice Index is consistent across generations, with advised Gen Y, Gen X and Baby Boomer clients all reporting better quality of life, financial confidence, and financial satisfaction, when compared to non-advised Australians.
…Gen Y utilises financial advice services differently than Baby Boomers and are more likely to expect digital engagement…
But there are age-based differences in the way Australians want advice to be delivered. Gen Y utilises financial advice services differently than Baby Boomers and are more likely to expect digital engagement, the study found.
“In addition, Gen Y are seeking education as well as advice. Those with an adviser are significantly more likely than older generations to describe the advice relationship as a form of self-improvement.”
A flexible experience including a mix of digital and in-person interaction is twice as likely to be important to Gen Y than older generations, the study found.
Sharpe says the study also busts a number of myths about financial advice.
“We often hear that financial advice is only for the rich, but the study shows that nine in 10 clients earning $120,000 or less per year who work with financial advisers feel financially secure which is higher than unadvised consumers on the same level of income.
“Another myth is that financial advice costs more than it is worth. But again, nine in 10 clients say the benefits outweigh the costs,” he says.
* The Value of Advice Index is based on consumer research undertaken for FAAA by research firm MYMAVINS. The quantitative study undertaken in August – September 2024 involved an online survey of 1,193 respondents each of whom was over 25 years earning over $90,000 a year or holding over $50,000 in investable assets.
