The 2018 Financial Advice Report from Investment Trends found that an estimated 2.1 million adults intend to turn to a financial planner for advice, up from 1.6 million in 2017.
However, trust levels in banks and financial planners fell severely over that same period. On a scale of 0 to 10, banks fell from a trust rating of 5.5 to 4.8, while financial planners fell from 5.1 to 4.8.
Investment Trends senior analyst King Loong Choi said the trust impact of the royal commission is real, and the advice industry must take proactive measures to rebuild trust among the wider population.
“One of the most important steps involves lifting transparency in every single aspect of the advice process,” Mr Choi said.
Further, the report found that while the majority of Australians who use a financial planner are satisfied with the service they receive, they are now much less willing to recommend it.
It noted that within the context of the royal commission, the satisfaction levels of Australians who use a financial planner only fell from 81 per cent to 74 per cent.
However, the willingness of those same Australian to recommend their financial planner fell into negative territory, according to Investment Trends’ Net Promoter Score.
On the client front, Mr Choi said the top barriers to seeking advice involve not having the time to find an adviser, perceptions of high fees and perceptions of insufficient wealth.
Therefore, he said it’s vital that advisers demonstrate the value of advice to potential clients in the context of their time and money.
“Potential clients must be convinced they need financial advice now, not later in life, and that the fees justify the service,” Mr Choi said.
“Raising Australians’ understanding of the value of advice is vital since many Australians only seek and receive advice when they approach retirement, when in reality they need advice earlier in the accumulation phase.”
The Investment Trends report was based on a survey of 7,639 Australian adults conducted in September 2018.
Demand is up, but with the amount of red tape I have to jump over, only a few can afford to pay.
A 74% satisfaction rating despite the unprecedented barrage of negativity hurled at us recently. I think this is an amazing result and it makes me proud to be a financial planner.
Spot on Ben, its us the make the difference every day with our clients. Most of the negative comments here seem to come from those that are either suffering a bad case of the green eyed monster, or are just trolls. Time to call a client!
Interesting that “transparency” is perceived as an important requirement by consumers. Many in the industry would argue we already have transparency. But we have [i]disclosure[/i], not transparency. They are different things. Disclosure is often used as a tool to hide things rather than make them more transparent.
Transparency is operating under your institutional parent’s brand name. Disclosure is operating under an independent sounding name like Hillross/Shadforth/Securitor then burying the fact you are controlled by AMP/IOOF/Westpac inside huge legalistic FSGs and SoAs that no one will ever read.
Regulators need to focus less on disclosure, and more on transparency.
You know I’ve never really thought of it that way, great comment. There is a disconnect between telling clients what you have to and telling them what you ought to. The ASIC planner search shows who licensees are ultimately controlled by, maybe this needs to be brought front and centre.
Hear hear. If not for the purposes of subterfuge, why are all these licensees not using their parent companies name?? No. Serioulsy, try to come up with a rational reaons for it.