The Colonial First State survey canvassed 1,828 Australians who have never received financial advice and 708 who currently have a financial adviser.
While the research found significant differences between the two groups in a number of areas, both advised and unadvised participants, or three quarters of the surveyed Australians, were either “very concerned” or “extremely concerned” about the cost of living.
Where things begin to diverge is confidence in their current and future financial position.
According to CFS, in a controlled sample of consumers with the same levels of wealth and household income, 68 per cent of those with a financial adviser said they are positive about their current financial position, compared to just 45 per cent of unadvised respondents.
Similarly, 71 per cent of advised Australians said they feel “very positive” about their financial future, while 44 per cent of those who have never received financial advice shared the sentiment.
“Less than half of unadvised Australians feel positive about their financial future, which is quite alarming when you consider the detrimental impact that financial stress can have,” said Kelly Power, chief executive officer of Colonial First State Superannuation.
“By comparison, the vast majority of those who have a financial adviser do feel positive, which suggests that advice has a tangible impact on how we feel about our finances despite concerns about the cost of living.
“When we asked more questions of both advised and unadvised consumers, we also found major gaps in both knowledge and confidence around investments and superannuation.”
The gap was similar when it came to making decisions around superannuation, with 67 per cent of advised respondents saying they feel confident doing so, compared with 40 per cent of unadvised Australians.
Fewer advised Australians (57 per cent) said they have “very good or excellent knowledge” of investments, however, the drop off was just as large for Australians that don’t receive advice, with just 30 per cent feeling the same level of confidence.
This higher confidence in their understanding of investments flowed through to their demand for choice, with 75 per cent of advised Australians wanting as much choice as possible, compared with 60 per cent of unadvised. Sixty-four per cent of those with an adviser were also open to taking investment risk, as opposed to just 38 per cent of those without an adviser.
“Most Australians who have never received financial advice aren’t confident making decisions about their superannuation. Considering how many Australians have a super account and how few have accessed advice, this is a wake-up call,” Ms Power said.
“Compare that to the vast majority of advised Australians who are confident, and the advice gap is clear to see.”
