{"id":9136,"date":"2011-02-02T09:51:26","date_gmt":"2011-02-01T22:51:26","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=9136"},"modified":"2021-02-02T07:05:25","modified_gmt":"2021-02-01T21:05:25","slug":"six-issues-impacting-client-access-to-financial-advice","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2011\/02\/02\/six-issues-impacting-client-access-to-financial-advice\/","title":{"rendered":"Six Issues Impacting Client Access to Financial Advice"},"content":{"rendered":"

Cost and scale of advice and mistrust of financial planners are\u00a0key\u00a0issues that adversely impact consumer access to advice, according to a new report.<\/p>\n

The report,\u00a0Access to Financial Advice in Australia<\/a><\/em>,\u00a0was released by ASIC just before Christmas.\u00a0 It identifies six main reasons that\u00a0impact consumer access to financial advice.\u00a0 They are:<\/p>\n

    \n
  1. Cost of advice<\/strong>: A significant gap exists between what consumers are prepared to pay for financial advice and how much it costs industry to provide advice.<\/li>\n
  2. Scale of advice provided<\/strong>: Many Australians, particularly those who have never previously accessed financial advice, want piece-by-piece simple advice rather than holistic advice.\u00a0 Many advice providers still provide holistic advice as the default option.<\/li>\n
  3. Consumer perceptions that advice is out of their reach<\/strong>: Evidence suggests some people do not seek financial advice because they feel their financial circumstances do not warrant advice.<\/li>\n
  4. Consumer mistrust of financial planners<\/strong>: Lack of trust in financial planners to provide unbiased, professional advice limits the number of consumers who seek advice and the value they place on financial advice.<\/li>\n
  5. Access to general advice and information<\/strong>: The provision of general advice or factual information is less extensive than it could and should be.\u00a0 For many consumers general advice and factual information may be sufficient to meet their current advice needs.<\/li>\n
  6. Financial literacy<\/strong>: Gaps in financial literacy, especially among certain demo-graphics and in relation to certain financial topics, limits some consumers\u2018 engagement with financial matters and so stops them from seeking advice.<\/li>\n<\/ol>\n

    These six factors cover a vast range of issues that are already being addressed by the industry, either as a natural consequence of industry and social change or through the Government’s Future of Financial Advice (FoFA) reform proposals.<\/p>\n

    One of the many issues raised in this report relates to the question of whether consumers prefer simple advice\u00a0as opposed to\u00a0comprehensive or holistic advice.<\/p>\n

    The report,\u00a0which draws heavily on a December 2009\u00a0consumer survey conducted by Investment Trends<\/a>,\u00a0\u00a0says more than 50% of respondents in that survey, across all age groups, prefer a simple or\u00a0DIY option rather than advice that covers a comprehensive plan.<\/p>\n

    Commenting on this finding, xLife<\/a> Managing Director, Russell Cain<\/strong>, said his growing practice operates under an advice structure that reflects only the area of interest nominated by the client:<\/p>\n

    “If clients call us to inquire about their superannuation needs, that’s what we focus on.\u00a0 If they ask only about insurance, then that is all we discuss with them,” said Mr Cain, whose practice operates under the Millenium3 Financial Services\u00a0licence.<\/p>\n

    Mr Cain goes further, telling riskinfo that the provision of piece-by-piece advice to clients is one of the key reasons for his firms initial and continued success\u00a0in its five years of operation.<\/p>\n

    However, the report also indicated that the preference for piece-by-piece simple advice was higher for those respondents who had never used a financial adviser than for those who had.<\/p>\n

    In other findings, the\u00a0report\u00a0found that face-to-face meetings were the preferred method for receiving advice, but that once the client\/adviser relationship had been established, most consumers were happy to communicate by phone or email with their adviser.<\/p>\n

    …\u00a0the appetite for non face-to-face advice is the greatest in insurance<\/h6>\n

    However, the report goes on to note that anecdotally, the appetite for non face-to-face advice is the greatest in insurance. ASIC\u00a0says this might be because most consumers already have some experience in getting car insurance, home and content insurance and travel insurance online or by phone.<\/p>\n

    Advisers can click the following link to\u00a0access ASIC’s report on Access to Financial Advice in Australia<\/a>.\u00a0 The report does not appear to have been widely covered because it was released on December 23 2010 and also because some of its key findings are addressed\u00a0in the Government’s FoFA reform proposals.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Cost and scale of advice and mistrust of financial planners are\u00a0key\u00a0issues that adversely impact consumer access to advice, according to a new report.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-9136","post","type-post","status-publish","format-standard","category-general","headers-new"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/9136","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=9136"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/9136\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=9136"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=9136"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=9136"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}