ASIC’s Report 627, Financial advice: What consumers really think, divided survey participants into four groups:
- people who received financial advice in the past 12 months (Group A);
- people who intended to get financial advice in the next 12 months (Group B);
- people who had considered getting financial advice in the past 12 months but had not gone ahead (Group C), and;
- people who did not fall into any of the aforementioned groups.
Barriers preventing consumer access to advice
The most commonly cited reason for not seeking advice was the perception that financial advice is too expensive, with 35 per cent of all participants (excluding Group A) citing it as a barrier.
This was followed by participants saying their financial circumstances are too small, followed by 26 per cent saying they like to manage their finances themselves and 19 per cent who say they don’t trust financial advisers.
Another key finding from ASIC was that not getting around to seeking advice was a major barrier for Group B and Group C, with 24 per cent of Group B and 38 per cent of Group C citing it as a factor.
“Barriers to getting financial advice included cost, distrust of financial advisers and difficulty of engaging with the industry,” ASIC said.
“These three barriers did not operate independently – rather, distrust of financial advisers influenced consumer perceptions of the cost of advice and how difficult it is to engage with the industry.
“Other barriers included disengagement, feeling vulnerable at the thought of seeing a financial adviser, not wanting to make lifestyle changes, and perceptions of financial advice as being risky or ‘only for wealthy people’.”
What consumers look for in an adviser
The ASIC report found that the top three attributes that online survey participants said they looked for or would look for when selecting a financial adviser were experience, reputation and the ability to talk to customers in a way they can understand.
“Participants acknowledged the difficulties that they had faced or would face when assessing the quality of a financial adviser and identified a range of factors they thought were important,” ASIC said.
“For example, many participants did not feel equipped to judge the expertise of a financial adviser and instead relied heavily on factors that could be easily observed, such as the interpersonal skills of the adviser.”
The next most-cited attributes included the ability to take the time to understand them and their goals, the adviser providing their advice at a low cost and their qualifications.
Only 13 per cent of Group A participants considered low cost to be important when looking for an adviser.
What consumers want financial advice on
The most common topics that survey participants said they had either received, or were interested in receiving financial advice on, were investments (e.g. shares, managed funds), retirement income planning and growing their superannuation, according to ASIC.
This was closely followed by budgeting or cash flow management, aged care planning and risk protection.
“Participants in the group discussions and interviews identified a range of benefits to getting financial advice, such as achieving their financial goals and improving their financial knowledge,” ASIC said.
The quantitative and qualitative research was conducted by WheretoResearch, and consisted of:
- four 90-minute group discussions with seven to eight participants in each group and 34 one-hour in-depth interviews (qualitative research); and
- an 18-minute online survey completed by 2,545 participants (quantitative research).
So comparethemarket just commisioned a survey on Financial Consciousness Index.
The questionsed were based on The multiple-choice test measures various factors that make a person “financially conscious”, from sophistication and willingness to capability and wellness. It combines questions about interest rates, savings and investment strategies with more subjective ones like, “What best describes your approach to finances?”
Results were weighted for a score out of 100, placing Australians into one of five groupings associated with different levels of financial consciousness.
The average score was 48 out 100
Yep Robo Advice is the way to go as clearly the average australian will understand what they are doing.
Taken from an article on news.com
If I may quote Captain Chesley “Sully” Sullenberger from the film “Sully” whilst being questioned during an investigation with his response to certain untruths put to him “… can we get serious now?” The article specifically details the quantitive and qualitative research that was conducted by WheretoResearch which consisted of four 90 minute group discussions with seven to eight participants in each group and 34 one-hour in-depth interviews. That’s 28 people. Who were they? How were they chosen? Also, conducted was an 18 minute online survey completed by 2,545 participants. Again, who were they? How were they chosen? Who spends 18 minutes on an unsolicited phone call? And the cruncher – “the most commonly cited reason for not seeking advice was the perception that financial advice was too expensive.” Well, DOH! I also like the point that they focus on – that 19 percent don’t trust financial advisers. That’s 19 percent of which group. The 28 or the 2,545? If it’s the 28 then according to ASIC 5.32 people in Australia determine that financial advisers are untrustworthy. Here’s an idea for ASIC – why not contact the 5 million+ clients already dealing with advisers and ask them the same question. TOSSERS!
This report released, then ASIC Commissioner Danielle Press is on the board of a robo-advice company, which when you look up their website seems to everyone should invest into ETF’s.
Talk about conflicts of interest!!!!!!
[quote=Anonymous]I believe this report was commissioned so AISC can start pushing robo-advice. Push Advisers out of Industry and spruik robo advice as the solution to the barriers they have created. Don’t you just love socialist lawyers thinking they know whats best for everyone!
[b]Spot on XY [/b][b][/b]
https://www.asic.gov.au/about-asic/news-centre/find-a-media-release/2019-releases/19-223mr-consumers-see-value-in-financial-advice-but-lack-of-trust-remains-an-issue/
i[b]n other news ASIC Commissioner Danielle Press is also = Six Park CEO Patrick Garrett said the[b] robo-advisor [/b][b][/b]was thrilled to welcome Danielle as the company’s first female board member.[/b][b][/b]
Danielle has held various senior roles at UBS Global Asset Management including Deputy Head (Australia) from 2007 to 2010, Head of Institutional Business from 2005 to 2007 and Head of Strategic Planning (Alternative and Quantitative) from 2003 to 2005. Prior to this Danielle was an Economist at the Reserve Bank of Australia.
Directors
Lindsay Tanner is a former member of the [b]Australian Government as Minister for Finance[/b][b][/b] from 2007 to 2010, and a former member of the House of Representatives for Melbourne from 1993 to 2010.
Mark Nicholson is a former managing director of global investment firm Tudor Investment Corporation who has also worked in senior roles at the [b]World Bank.[/b][b][/b]
Six Park Founder and Chairman of the Investment Advisory Committee. Prior to founding Six Park, Brian was a [b]founding Member of the Board of Guardians of the Australian Government Future Fund[/b][b][/b], and served on that Board from 2006-2012. He also is the former Deputy Chairman of the Australian Government’s Innovation Australia Board.
Not that I am suspicious but think we are about to see a push for Robo advice people I think these people have an agenda
[/quote][quote=Anonymous]I believe this report was commissioned so AISC can start pushing robo-advice. Push Advisers out of Industry and spruik robo advice as the solution to the barriers they have created. Don’t you just love socialist lawyers thinking they know whats best for everyone!
[b]Spot on XY [/b][b][/b]
https://www.asic.gov.au/about-asic/news-centre/find-a-media-release/2019-releases/19-223mr-consumers-see-value-in-financial-advice-but-lack-of-trust-remains-an-issue/
i[b]n other news ASIC Commissioner Danielle Press is also = Six Park CEO Patrick Garrett said the[b] robo-advisor [/b][b][/b]was thrilled to welcome Danielle as the company’s first female board member.[/b][b][/b]
Danielle has held various senior roles at UBS Global Asset Management including Deputy Head (Australia) from 2007 to 2010, Head of Institutional Business from 2005 to 2007 and Head of Strategic Planning (Alternative and Quantitative) from 2003 to 2005. Prior to this Danielle was an Economist at the Reserve Bank of Australia.
Directors
Lindsay Tanner is a former member of the [b]Australian Government as Minister for Finance[/b][b][/b] from 2007 to 2010, and a former member of the House of Representatives for Melbourne from 1993 to 2010.
Mark Nicholson is a former managing director of global investment firm Tudor Investment Corporation who has also worked in senior roles at the [b]World Bank.[/b][b][/b]
Six Park Founder and Chairman of the Investment Advisory Committee. Prior to founding Six Park, Brian was a [b]founding Member of the Board of Guardians of the Australian Government Future Fund[/b][b][/b], and served on that Board from 2006-2012. He also is the former Deputy Chairman of the Australian Government’s Innovation Australia Board.
Not that I am suspicious but think we are about to see a push for Robo advice people I think these people have an agenda
[/quote]
Have been saying this for ages, and today an article about AMP pushing Robo Advice
I believe this report was commissioned so AISC can start pushing robo-advice. Push Advisers out of Industry and spruik robo advice as the solution to the barriers they have created. Don’t you just love socialist lawyers thinking they know whats best for everyone!
[b]Spot on XY [/b][b][/b]
https://www.asic.gov.au/about-asic/news-centre/find-a-media-release/2019-releases/19-223mr-consumers-see-value-in-financial-advice-but-lack-of-trust-remains-an-issue/
i[b]n other news ASIC Commissioner Danielle Press is also = Six Park CEO Patrick Garrett said the[b] robo-advisor [/b][b][/b]was thrilled to welcome Danielle as the company’s first female board member.[/b][b][/b]
Danielle has held various senior roles at UBS Global Asset Management including Deputy Head (Australia) from 2007 to 2010, Head of Institutional Business from 2005 to 2007 and Head of Strategic Planning (Alternative and Quantitative) from 2003 to 2005. Prior to this Danielle was an Economist at the Reserve Bank of Australia.
Directors
Lindsay Tanner is a former member of the [b]Australian Government as Minister for Finance[/b][b][/b] from 2007 to 2010, and a former member of the House of Representatives for Melbourne from 1993 to 2010.
Mark Nicholson is a former managing director of global investment firm Tudor Investment Corporation who has also worked in senior roles at the [b]World Bank.[/b][b][/b]
Six Park Founder and Chairman of the Investment Advisory Committee. Prior to founding Six Park, Brian was a [b]founding Member of the Board of Guardians of the Australian Government Future Fund[/b][b][/b], and served on that Board from 2006-2012. He also is the former Deputy Chairman of the Australian Government’s Innovation Australia Board.
Not that I am suspicious but think we are about to see a push for Robo advice people I think these people have an agenda
Ya gotta love these guys, decades asleep at the wheel and now suddenly they are all over it………
the issue has and never should have been about commissions and the like, it always needed to be about governance and sensible compliance
“These three barriers did not operate independently. We caused all of them together.”
The only barrier to Advice are the incompetent people at ASIC as well as the ideological idiots in Canberra.. Perhaps taking to understand the industry might be a great start before introducing endless amounts of red tape
[quote=Perplexed ]ASIC should ask itself how any of it’s actions actually help?
Advice is getting more costly, harder to comprehend and the process is even less engaging than it once was. Why? Regulatory Compliance, an inflexible regulator and a guilty until proven innocent regime.
Trust of advisers is eroded by the regulator when advisers aren’t treated like professional. Instead advisers are treated like amateurs who are forced to explain or justify every minute detail.
No wonder the public is wary
[/quote][quote=Perplexed ]ASIC should ask itself how any of it’s actions actually help?
Advice is getting more costly, harder to comprehend and the process is even less engaging than it once was. Why? Regulatory Compliance, an inflexible regulator and a guilty until proven innocent regime.
Trust of advisers is eroded by the regulator when advisers aren’t treated like professional. Instead advisers are treated like amateurs who are forced to explain or justify every minute detail.
No wonder the public is wary
[/quote]
ASIC is the number 1 culprit demonizing advisers and giving the advisers a terrible reputation in the market place. survey those clients who are currently engaged with an adviser and a completely new picture of an adviser will emerge, highly trustworthy, competent, valuable
[quote=Anon]In the UK after the introduction of the Retail Distribution Review (RDR) on 1 January 2013 the number of advisers fell from 300,000 to 22,000 last year, 92% exited. RDR was their version of what we are experiencing now. Mum’s and Dad’s can’t afford advice anymore, so the UK government has placed a levy on the remaining 22,000 advisers to fund National Retirement Information Centres. The Mums and Dads can get information on retirement issues from these Centres but then need to go off and do it themselves. We are heading down that path now in Australia. What a crime! [/quote][quote=Anon]In the UK after the introduction of the Retail Distribution Review (RDR) on 1 January 2013 the number of advisers fell from 300,000 to 22,000 last year, 92% exited. RDR was their version of what we are experiencing now. Mum’s and Dad’s can’t afford advice anymore, so the UK government has placed a levy on the remaining 22,000 advisers to fund National Retirement Information Centres. The Mums and Dads can get information on retirement issues from these Centres but then need to go off and do it themselves. We are heading down that path now in Australia. What a crime! [/quote]
it’s not a crime. that is what the consumers, regulators, the media think they want.
let them have it. and then when it is not too their liking we can talk about it openly
the only problem is all the advisers are already exiting en masse now
Consumers want lower cost advice, this come at a cost, as the advice is then funded via product or insurance commission. There is your problem
In the UK after the introduction of the Retail Distribution Review (RDR) on 1 January 2013 the number of advisers fell from 300,000 to 22,000 last year, 92% exited. RDR was their version of what we are experiencing now. Mum’s and Dad’s can’t afford advice anymore, so the UK government has placed a levy on the remaining 22,000 advisers to fund National Retirement Information Centres. The Mums and Dads can get information on retirement issues from these Centres but then need to go off and do it themselves. We are heading down that path now in Australia. What a crime!
ASIC should ask itself how any of it’s actions actually help?
Advice is getting more costly, harder to comprehend and the process is even less engaging than it once was. Why? Regulatory Compliance, an inflexible regulator and a guilty until proven innocent regime.
Trust of advisers is eroded by the regulator when advisers aren’t treated like professional. Instead advisers are treated like amateurs who are forced to explain or justify every minute detail.
No wonder the public is wary
I believe this report was commissioned so AISC can start pushing robo-advice. Push Advisers out of Industry and spruik robo advice as the solution to the barriers they have created. Don’t you just love socialist lawyers thinking they know whats best for everyone!
The survey results are not surprising. Distrust is understandable, but I have never known a time when advisers were trusted. Not getting around to it is the consumer’s issue. Why consumers delay, or are apprehensive about seeing an adviser is that it is very revealing about what the consumer has, or has not done, and they may feel judged. The peak bodies also need to educate the public that financial advisers are more than just investment advisers and you do not need to have money to invest to see an adviser. Consumer’s need disposable income (savings) to pay for the advice, which in my experience is where things get stuck.
ASIC are really bright, glad to know they are overseeing us…….NOT! Pick up the phone and talk to any adviser and they could have told you this! Flogs!
So…”the top three attributes that online survey participants said they looked for or would look for when selecting a financial adviser were experience, reputation and the ability to talk to customers in a way they can understand.”
I don’t see anything here about how many letters are behind the advisers name (i.e. Diploma’s, Degrees etc) or how much clients appreciate the enormous amount of paperwork and extra time advisers have to allocate to work through the process with them now to actually get the financial advice they want but I’ll put my house on it ASIC ignores that and continues to burden advisers with its relentless OVER-regulation.
I just want ASIC to take 100% ownership of the damage it’s caused this industry in years to come when there ain’t no more experienced advisers, that have good reputations and who can talk to customers in a way they understand, left because they forced us all out.
In the report they have specified “In 2020–21, we will be conducting further research to explore whether there is a problem with unmet advice needs in Australia.” You have found a timeframe to ASIC acknowledging they are the problem.
ASIC is taking the piss right?
ASIC.. perhaps less time wasting time and money and reports that justify your tax payer funded existence. How about actually consulting with the industry – sit in on a few appointments – spend time looking at the red tape crap that you keep creating. You might find that actually helps you be relevant to the industry
The most commonly cited reason for not seeking advice was the perception that financial advice is too expensive, with 35 per cent of all participants (excluding Group A) citing it as a barrier.
Please tell me how much cheaper it will be for them going forward ASIC oh wise one.
Do ASIC read their own reports? Lets see – ” the top three attributes that online survey participants said they looked for or would look for when selecting a financial adviser were experience, reputation and the ability to talk to customers in a way they can understand”. Funnily enough none of these requirements are skills automatically found in newish advisers with “relevant degrees” or 8 unit Diplomas. Its all done on the job!.
ASIC apparently are encouraging licensees to eliminate advisers who ASIC believe should not be with us. ASIC would prefer NIL RISK COMMISSIONS but ASIC has no answer to the risk specialists being forced out because clients will not pay fees for risk advice only.
As those vanishing risk advisers and their new business volume is decimated, APRA should be very worried re the stability of Statutory Funds weighed down with mature risks and potential claims. Up go the premiums – AGAIN !
Experience and reputation do not come with the degree or Diploma. And FASEAs mentoring rules will stop smaller adviser businesses taking on trainee advisers. Yet another ASIC “big end of town” proposition
I am dumbfounded with the article. Harass, intimidate and bully advisers out of the market. Take away commissions and we must work for nothing what is ASIC actually thinking. Client’s cannot afford advice no sh*t Einstein. Once again ASIC you never go after the big end but choose easy targets. I wonder when there is a handful of adviser left Joe public has zero chance of getting any advice.
No doubt ASIC’s response to this will be to mandate what we charge for our services rather than think about making it easier to deliver advice.
The greatest irony in all this, is ASIC has created every one of these barriers. Unbelievable.
Hilarious! Well ASIC and Government……DO SOMETHING ABOUT IT!! You guys have made it this way and continue to do so!! Look forward to going to see the next ASIC Comedy Club (ACC) show, which I believe will have a cameo from Josh Frydenberg next week. Should be a laugh (as per usual) !
“I want everything, and I want it any time, any place, and to cost next to nothing from someone I trust”
only going to get more expensive.
Financial Advice is too expensive. And the government (through ASIC) have made it that way.
Is this a joke? ASIC release two reports, 1. Advice is good for customers and 2. Advice is two expensive (tell us something we didn’t know).
ASIC, the FSC and Government are the REASON advice is too expensive. They are also the REASON there will be hardly any advisers left in 4 years.
No doubt ASIC will accept their share of the blame for the lack of access to advice for retail clients. Any minute now……