Consumers choose scaled advice
Investors are increasingly indicating a preference for scaled or limited advice over comprehensive financial planning services, according to a study by Investment Trends.
A recent Investment Trends survey of more than 1,000 investors, which included self-managed superannuation trustees, found that 25 per cent of respondents are 'do-it-yourself' investors and are not interested in any professional advice, while 50 per cent said they were open to advice services.
Of that 50 per cent who are interested in advice, many are increasingly interested in scaled advice, Investment Trends senior analyst Recep Peker told the 13th annual Wraps, Platforms & Masterfunds conference in the Hunter Valley yesterday.
“What we are finding is that very few Australian investors are interested in full comprehensive advice,” Mr Peker said.
“Rather, they are interested in modular advice; so there are plenty of opportunities for planners to scale their advice services and look seriously at this.”
However, BT Financial Group's head of platforms and insurance, Kelly Power, told the conference that there are concerns about the implementation of scaled advice in practice.
“There are suggestions that scaled advice will be just as expensive to advisers as comprehensive advice – but something needs to be done about this. We can’t have a situation where they cost the same,” Ms Power said.
More broadly, Ms Power said that an increasing focus on cost-efficiency from platform providers and the financial institutions will help make advice cheaper to provide, thereby allowing greater access to advice for a range of consumers.
“It is a serious problem that those consumers who most need advice often can’t afford it,” Ms Power said.
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