Money and Life
(Financial Planning Association of Australia)
A new ASIC report offers key insights into consumer perceptions of financial advice. Find out how to get off to the right start with your financial planning experience.
In an independent research study commissioned by ASIC, more than 2,000 Australians were asked about their beliefs and perceptions about financial advice as well as their experiences of receiving advice. The Financial advice: What consumers really think report, published in August 2019, shares findings from an online survey of 2,545 participants as well as group and one-on-one discussions. It presents a picture of a profession that Australians feel they need, but has some way to go in developing a sense of trust and value among consumers.
Many Australians want financial advice
According to the report, demand for financial advice among those surveyed is high. 41% said they planned to seek financial advice in the future. And nearly twice as many – 79% – acknowledged that ‘Financial Advisers have expertise in financial matters I do not have’. These figures clearly demonstrate a recognised need for informed and professional advice among those surveyed.
In the 2017 Live the Dream survey and research report, the Financial Planning Association found that more than half of Australians (54%) saw financial freedom and independence as vital in their ability to ‘live the dream.’ So it’s no wonder financial advice is on the to-do list of so many Australians.
Trust and perceived cost are barriers
But when it comes to actually seeking financial advice, a fair number never follow through on their intentions. The ASIC report found that 20% of respondents had thought about getting financial advice in the last 12 months, but hadn’t gone ahead.
So just what is standing in the way of Australians taking steps to get professional advice on their finances? Figures from the report suggest that affordability, trust, and value are three significant barriers stopping Australians from meeting with a financial planner. 35% consider financial advice to be too expensive, 18% do not see the value in seeing a financial planner and 19% don’t trust financial planners. For others it may simply be a case of not knowing where to start with the whole process of getting advice. In group discussions and interviews, people said they found it difficult to know how to find a financial planner and that they’re getting quality advice.
Finding the right financial planner
Based on the experiences of people interviewed and surveyed for the ASIC report, asking around for a referral is often a good method of approach for finding a trusted financial planner.
But what if you don’t know anyone who’s had experience with financial advice? Many people may not encounter someone in their circle of friends or family who has been advised by a financial planner. If you do find yourself narrowing down your options based on your own research, there are tips from the ASIC report to guide you. In ranking the attributes they considered most important in choosing a financial planner, the following four scored highest with survey participants:
– Level of experience
– They talk to me in a way I can understand
– They take the time to understand me and my goals
These findings tally with FPA research from 2017, which found the most common criteria for selecting a planner were trust, comfort, rapport, impartiality, tailored recommendations and reputation.