A survey of more than 50,000 financial product consumers has found only 7.4 per cent of Millennials (born between 1976 and 1990) with a financial product acquired it through a financial adviser, with that number dropping to 4.1 per cent for Generation Z (born between 1991 and 2005).
The research house said this may be due to superannuation being the “dominant wealth management product” used by these ages, meaning Millennials and members of Generation Z are more likely to take advice from their employers.
Those born prior to 1946 were the most likely to have obtained financial products through an adviser, with 46.5 per cent of these cohort seeking professional advice.
Almost one in three (31.7 per cent) Baby Boomers (born between 1946 and 1960) obtained their financial products from an adviser, with only 17 per cent of Generation X (born between 1961 and 1975) doing the same.
“This research shows that with only around one in six obtaining their wealth management products through a finance professional, there is a big opportunity to expand their use,” said Roy Morgan industry communications director Norman Morris.
“Given the complexity of this market and rule changes, professional advice is probably necessary for most, particularly as balances grow, but it appears that only when balances approach a few hundred thousand dollars or retirement approaches that advice is sought.
“The challenge for professional advisers and wealth management customers is how to provide advice to low value customers and how to get them more involved in a topic of little interest to them.”
Roy Morgan proving once again they are dinosaurs. Get with the times guys, financial advice isn’t about being sold a product any more.
Roy Morgan hasn’t heard of FOFA, or Opt IN or Best Interest. Compliance and Red tape means it’s impossible to charge like Accountants or even charge for once off work. My old dealer group required 3 different forms and processes to be implemented just to charge a fee. The impact of Best interest obligations means closer relationships with clients. Hence there is only a certain type of client you can work with and everything else is now Industry super funds, call centres and Google. Even some advisers still don’t understand this.
If an industry fund can offer offer general and personal advice at the same time then why can’t the rest of us small businesses we need to move our business to help cater for once off transactions and have similar paperwork ready to go in the background tick and flick to stop us being sued just like the industry funds.Personal advice in an industry fund when they have 12 investment options what a joke.
Morgans clearly don’t understand (any better than some in the industry!) that product and advice are not necessarily connected and that smarter consumers don’t pay for product the pay for advice about financial planning. Buying product also does not imply advice. Consumers can buy product after paying for advice about what to do and not to do and our millennial clients pay us for broad advice and some specific advice and then do their own thing with us as mentors. You would have thought that someone offering a public commentary on our industry would at least have understood that most fundamental of facts.
and what you have identified is the crux of the issue, in that those who are in charge and running these business as well as those regulating do not understand that very important distinction AND
as a consequence regulating us to death
Obviously Roy Morgan has as little understanding of “advice” as some in our industry. There need not be any connection between obtaining product and advice about financial matters. Product is available online and directly and it makes sense for millennials to obtain product that way, but many still get and pay for advice about what they need, who does it better, when to stop doing stuff as well as tips about estate planning, budgeting, spending wisely, ethical investing, etc, etc. Few of my younger clients “obtain product” through me. Why should they?