Pandemic influencing value of financial advice for Australians

The industry body’s annual Money & Life Tracker: Freedom Edition report released on Monday highlights that a second year of the COVID-19 pandemic has resulted in more Australians choosing to take a “financial health check”.

The survey, conducted in September, found that while 35 per cent of the respondents’ income was affected by the lockdowns — and 34 per cent were unsure if they had enough savings to get through it — compared to this time last year, 11 per cent said they are now in a stronger financial position.

Twenty-six per cent of the respondents also said they have made changes to their financial situation, including to “be more frugal” about lifestyle choices (44.7 per cent in 2021 compared to 30.8 per cent in 2020), have an increased focus on growing savings (43.9 per cent), and paying off debt (41.3 per cent in 2021 compared to 23.3 per cent in 2020).

Encouragingly, while majority of Australians took a DIY approach to their financial planning, FPA’s research found that there has been an increase in consumers seeking professional advice.

FPA CEO Dante De Gori said the research showed that the value of financial advice has risen due to the challenges and uncertainty brought on by the pandemic and extended lockdowns.

“Our research findings from 2020 showed those who had a financial planner by their side were able to cope more confidently than those who didn’t,” Mr De Gori said.

“In light of this, we encourage as many Australians as possible to take stock of their circumstances and explore how a qualified financial planner could help them.”

Mr De Gori added that demand for advice is surging on the back of extended lockdowns around the country, claiming that 2.6 million non-advised Australians are intending to engage with a financial planner over the next two years.

“This figure is up significantly from 2.1 million in 2019, and double the levels observed in 2015,” he said.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.