Despite their understanding the benefits, millions of Australians will not seek financial advice any time soon, providing an opportunity for financial institutions to approach these people directly, according to Investment Trends.
The inaugural Investment Trends Direct Client Report showed that while 86 per cent of survey respondents have concerns about their finances, they will not consider turning to a financial planner for help.
Over the next two years, 4.3 million Australians intend either to start investing, purchase life insurance, make changes to their superannuation or make plans for retirement without an adviser.
They will, however, have questions before going through the processes, and that is where financial institutions can play a role, said Investment Trends head of research for wealth, Recep Peker.
"Financial institutions seeking to holistically service their clients need to help and guide them through their financial decision-making process by addressing the gaping information needs," he said.
"Banks and super funds must have a strong digital presence to capture these relationships, as the majority will turn to online sources for guidance."
Mr Peker said these financial institutions must also look beyond financial advice if they want to access this non-advised market.
"Financial planners are an important and effective channel in helping Australians with their finances, and many people recognise the benefits of using one. However, financial institutions need to look beyond the financial planning channel to engage the rest of the population with their finances," he said.
"Non-advised adults collectively hold 70 per cent of the total wealth in circulation, so it's vital that banks and super funds develop an effective direct channel proposition to meet their customers' and members' needs comprehensively," he said.
Mr Peker added that robo-advice has the potential to become a tool for engaging people with their finances.
The report indicated that 1.5 million people said they would consider robo-advice that recommends investments, while 2.6 million said they would use a tool that shows them how to reach their financial goals.
"Robo-advice tools can be a cost-effective method for banks and super funds to engage those who are not actively considering a financial planner or cannot afford one," Mr Peker said.
"Most current generation robo-advisers are focused on investment selection, but these tools have the opportunity to really flourish by helping Australians with more than just their investment selection.
"Competition is likely to be intense in this space. While banks have an advantage, 36 per cent of people prefer their super fund to provide these tools," he said. "This competition will be an important factor in driving the development of world-class solutions that meet Australians' comprehensive requirements."
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