Lack of trust discouraging Australians from financial advice: ASIC
Australians are discouraged from engaging an adviser by several factors, including high costs and significant distrust of the industry, new research shows.
New ASIC consumer research released this week reveals the barriers faced by consumers when considering financial advice.
ASIC’s Report 627, Financial advice: What consumers really think presents independent research into consumer experiences of, and attitudes towards, financial advice and the advice industry.
"While Australians believe financial advisers can offer significant expertise on financial matters, our research shows that many don’t seek advice because they are put off by factors such as high costs, significant distrust of the industry and a perception that financial advice is only for the wealthy," ASIC commissioner Danielle Press said.
According to the research, while 41 per cent of Australians intend to get personal financial advice in the future, many of them will not proceed because of these perceived barriers.
But there is good news for the industry, ASIC pointed out, with consumers who had recently received financial advice reporting a more positive attitude towards financial advisers than those who had not.
Moreover, Ms Press revealed that even limited knowledge of industry reforms such as FOFA (Future of Financial Advice) appears to have improved consumer attitudes towards the sector.
“Although not all Australians need financial advice, it is imperative that people wanting advice when making critical financial decisions are able to access high quality advice and, equally, feel confident that the advice is in their best interests,” Ms Press said.
The research found that consumers generally seek financial advice for investments such as shares and managed funds, retirement income planning, growing their superannuation and budgeting or cash flow management.
Interestingly, it highlighted that use of digital advice is still very low, at 1 per cent, however 19 per cent of research participants said they were open to getting digital advice once it was explained to them.
“Financial advisers have an important role to play in helping consumers improve their financial position, and there is a real opportunity for the advice industry to rebuild that trust by reorienting itself and putting consumers at the heart of its services,” Ms Press concluded.