New Dynamics Setting the Stage

Australia’s financial advice industry has plenty to be optimistic about. Most of all, it’s important to remember that the demand for advice remains strong – and is even increasing.

According to 2020 research by Investment Trends, around 2.6 million non-advised Australians said they intend to seek help from a financial adviser in the next two years. This was a substantial increase over the 2.1 million Australians with that intention in 2019, and a doubling of the 1.3 million identified in 2015.4

Similarly, the pool of Australians who actively invest – and who represent a strong pipeline of advice demand – is growing faster than ever.

It’s estimated that around 46% of Australians now hold investments5 other than their primary residence or superannuation, with 6.6 million Australians owning listed investments. Of those, more than 1.25 million are described as ‘active’ online investors, and over 400,000 made their first sharemarket trade in 2020.6 There are also just over 600,000 SMSFs currently registered with the ATO.7

Much of this growth is being driven by younger investors. According to Canstar research, around 42% of Gen Z Australians (aged 18 to 25) and 44% of Millennials (aged 26 to 40) invested in the sharemarket for the first time during 2020.8

At the same time, the mindset of many advisers is changing. Advisers that were previously part of groups that were risk averse or lacked investment in new technologies are enjoying newfound freedoms. Without the burden of legacy systems, they’re able to think outside the square to build contemporary business models that are agile and responsive to consumer needs.

04

T Sharpe, ‘Advice demand doubles in 5 years’, Professional Planner, 17 September 2020.

05

ASX, Australian Investor Study 2020.

06

A Vickovich, ‘First-time traders hit 400,000 during pandemic’, Australian Financial Review, 11 March 2021.

07

Australian Tax Office, Self-Managed Super Fund Quarterly Statistical Report, December 2021.

08

A Vickovich, ‘Why more than 40pc of Millennials and Gen Z bought shares in 2020’, Australian Financial Review, 22 December 2020.

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