The RaboDirect Financial Health Barometer – A Five-Year Review found that in 2015, only 29 per cent of respondents agreed or strongly agreed that they trusted financial advice, down from 40 per cent in 2014.
The white paper also found that in 2015 almost twice the number of people now think that advice is “only for the wealthy”, compared to when the survey was conducted in 2012 (28 per cent versus 17 per cent).
However, Glenn Wealands, head of research and analytics at Rabobank Australia and New Zealand, said Australians did not need to be rich to enjoy the benefits of being in control of their finances.
“In fact, it isn’t about what you have, it’s what you do with it that matters,” Mr Wealands said.
The report found that the bank balances of Australians could be on the decline due to falling consumer confidence levels.
The study, which covered a five-year period from 2011 to 2015, found that the more confident Australians were about their finances, the more likely they were to say that they were completely happy with life, and actively grow their wealth.
Confidence levels peaked in 2013, but have declined in recent years.
The report found a correlation between consumer confidence and the level of consumer savings. Average savings in a typical month in 2014 were $908, falling to $705 in the 2015 survey – a decline of nearly 29 per cent. In 2014, 49 per cent of consumers agreed or strongly agreed that they were confident with their finances, a number that dropped to 45 per cent in 2015.
“The first Financial Health Barometer white paper has highlighted a growing need to reinvigorate Aussies’ confidence in their finances,” Mr Wealands said.
“There is a real opportunity for all Aussies to become more informed about their finances to help boost their bank balances.
“Financial control is within the grasp of most people and it’s about taking simple steps such as paying down debt first, and seeking out an account earning a higher rate of interest with no account keeping fees.”
The research showed that the amount of money Australians think they will have to retire on is below industry estimates and is declining.
“In 2012, Aussies were expecting to retire with $470,485 and in 2015 this amount dropped to $398,707,” the report said.
This survey also found that the confidence levels were much higher among those respondents who had an adviser, with 75 per cent saying they trusted the advice they were given.
In this survey of 10,000 consumers,the respondents who had engaged the services of an adviser were overwhelmingly in favour of the trustworthy nature of the advice received.
What the gov’t needs to quickly realise is that by continually adding to the cost of running an advisory practice in combination with reductions in remuneration, it will lead to a decrease in the current adviser numbers, apprehension and reluctance of new entrants into the advisory business and less consumers receiving quality financial advice.
This will in turn result in an even greater number of people not feeling confident regarding the financial advice industry as they won’t have been able to access or source advice.
Less people seeking advice = less confidence in the advice industry simply because they have not had the experience by which to make an informed judgement.
The recipe is simple, but the Govt,the FSC and ASIC keep getting the ingredients in the wrong proportions and in the wrong order.
Nobody wants to eat a cake that is burnt black on the outside and undercooked in the middle!
Well its both the scandals but also simply the cost to produce advice these days… When it costs several thousand to produce and implement an SOA due to increasing legislation of course you price people out of the market.