A majority of Australians are not interested in financial advice because the industry lacks effective ways of making financial goals a part of everyday life and inspiring action among consumers, consultants have said.
Speaking to ifa, Caboodle Financial Services managing director Peita Diamantidis said a greater focus is needed from advisers on changing consumer behaviour, not just providing knowledge and expertise.
“Knowledge isn’t enough to change behaviour. The gap is inspiration and motivation and that’s why people still have money challenges,” she said.
“You and I know exactly what we need to do to be fit and healthy – eat vegetables and exercise, yet we don’t do it. For example, it might be that only until she falls pregnant will one woman get the motivation to quit smoking or only until a father finds out his daughter is going to get married will he get the motivation to lose weight.
“Knowledge is the first step but the gap at the moment is inspiration and motivation to take action.”
Senior executive of strategic partnerships at digital investment firm Quantifeed, Graeme Brant also told ifa that the reason the advice sector struggles to connect with and profit from the mass affluent market is because of its inability to make financial goals actively present in an individual's everyday life.
“For example, with a fitbit, people are far more likely to run that extra kilometre. Unless you have constant engagement with something, no matter how important a goal is, it will get pushed to back of the mind beneath all of life’s other priorities,” Mr Brant said.
“The industry struggles to democratise wealth management for a significant proportion of the population and deliver advice engagement on the individual terms of each person.”
Mr Brant warned against advice businesses with a set-and-forget customer model, saying the future is in multi-faceted client bases who are engaged through technology that makes financial goals an ever-present part of their day.
“There’s obviously a significant proportion of the population who really want digital engagement for wealth management – they have digital engagement for every other aspect of their life and the advice sector is just playing catch-up,” he said.
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