Research released by the Association of Superannuation Funds of Australia (ASFA) in July revealed that 18 to 34-year-olds are significantly more likely to seek financial advice via social media than any other age group and are more likely to fall victim to online scams.
Appearing on Ausbiz, DASH chief executive Andrew Whelan explained that because young Australians are largely unable to afford to access a professional financial adviser, they are left seeking help “from areas that are accessible rather than areas that are trusted”.
Whelan said Australia needs banks and super funds to start offering simple advice to help bridge the advice gap because until financial advice is more affordable, people will continue to seek the help they can despite the potential risks.
“So what we are seeing across the board is, particularly with industry funds and banks, they’re going to come back into wealth, even though the ink is not yet dry on [legislation]. Certainly with banks selling out of wealth, we are seeing them coming back, and they need to,” he said.
“Banks need to come back and industry funds need to take a role with providing technologically driven advice from trusted sources, because people will get what they want, but … we can’t guarantee whether or not it’s worthwhile listening to.”
He said that while the amount people are willing to pay for advice has “doubled in the last five years”, the average Australian still only wants to spend just under $1,000, highlighting an increase in the perceived value of advice while also falling woefully short of the reality of advice fees.
When speaking on the government’s role in fixing the issue, Whelan said that “for the first time in a long time, the government is actually doing as much as it can”.
“I think, certainly, the Labor government has been accused over a long period of time of buddying up too closely to industry funds, but over recent times with QAR and the retirement income covenant, they’re bashing them over the head, saying, you need to do more, particularly for people who are entering into retirement, which is a really complex, multifaceted problem,” he said.
“The government, for the first time in a really long time, is actually doing the right thing in terms of focusing on the advice problem in terms of accessibility. The industry needs to respond and respond quickly now. So, I think it sits with us.”
Whelan explained that the next 12 months will likely see super funds rejoin the advice space to provide basic digital advice to millions of Australians in need of help who would otherwise be unable to afford it.
“Over the next 12 months, what we will see is a wide variety of industry funds coming out with follow the bouncing ball, self-help, advice journeys. So you can choose, ‘Am I in the right fund?’ ‘Do I have enough for retirement?’ ‘Do I need insurance?’ That is, it will be available for free to millions of Australians,” he said.
“I think give it 12 to 24 months, I think the industry will have pivoted to be able to offer this across the board.”
The advisors are panicking.
No, just sick of “pundits” and “industry experts” throwing us under the bus, for product providers to rip clients off and sell vertically integrated rubbish veiled as advice, and are calling it out. It will fail spectacularly regardless. Just as it did overseas with more sophisticated technology, easier tax laws and less regulation – people still fundamentally wanted to speak with people.
Careful, Andrew…. remember, it’s the advisers who butter your bread. DASH-it.
He needs bigger clients like industry funds and banks to return the venture capital financing hence the article. No interest in helping Australians get advice from professional qualified experienced financial advisers or reducing the choking red tape taxes and over regulation which caused and removal of which would end the gap
$1000 to pay for advice what a joke how much do people spend on gambling or holidays or accountants or lawyers if people want quality financial advice that can have a huge financial impact on them in the long term depending on their stituation you could be talking about hundreds of thousands of dollars and for hnw millions, you have to pay a fair amount to get good advice $1000 is ridiculously low
Question – was it not the case that AMP/Banks etc were great at this but the regulators said community expectations are that Product Providers should not be paying for Advise because of conflicts – and now you want it back?
Technology lrovider with vested interests says technology driven vertically integrated advice is the answer. I’m sorry, NO. Reducing the red tape and making it easier and more affordable for professional, experienced educated financial adviser to help Australians is the answer. Simple. Look overseas there’s a huge flood of over engineered and over funded robo advice being ignored with a preference to speak with people. Stop selling your product and start helping your primary client Andrew, ADVISERS to help more people and call put the choking red tape huge barriers to entry and highest cost to practice in the world.