Appearing on a new episode of the ifa Show, Midwinter chief commercial officer Steve Davison said it is a fact that some people don’t engage with advisers because they think financial advice is too expensive.
“The cost to produce advice today, it’s a lot, and there’s sticker shock when people would say, ‘Oh, that’s a lot of money. I can’t afford that,’” Mr Davison said.
“They also don’t think it’s for them. So they actually think advice is for people that are wealthier, or for rich people. And so we’ve actually got to help them understand that that’s the paradox, right?”
Mr Davison said the emotional barriers are something that the sector can control, including building trust and confidence with prospective clients, however concedes that there is still a long way to go.
Among the many factors advisers are up against, including costs and regulations, is the ability to access advice on social media.
“It’s really easy to get financial information that borderlines advice these days,” he said.
“Whether it be through a Reddit forum, whether it be through an influencer on a podcast or on an Instagram channel, or a TikTok channel.
“I think the question might be more it’s a question of how much do we regulate those channels, or how much do we actually need to think about the level of regulation in the current advice channels.”
Last month, Financial Services Minister Jane Hume slammed an ASIC review into financial influencers as the equivalent to creating a nanny state.
Listen to the full ifa Show episode with Mr Davison here.
The fact the adviser “profession” originally emerged from a commission paying swamp doesn’t help – and needed a very public Royal Commission, and now overregulation to compensate.
It’s a shame. The real rouge advisers have mostly all gone yet the good ones are now saddled with unworkable red tape. We’ve ended up with a lose-lose situation.
Advisers should perhaps all just write barefoot investor type books and charge a fee to read it out loud to their clients !