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Part 1: The current landscape
1. The overall advice context in Australia
Notwithstanding concerted efforts by various stakeholders over recent years, the use of financial advisers by Australians remains stubbornly low. This despite multiple surveys finding high customer satisfaction levels experienced by advised clients and despite the obvious appetite Australians have for information about how to manage their money (most recently evidenced by the popularity of finfluencers – licensed and unlicensed).
1.1 Demand for advice is strong and growing
2020 research1 found that the demand for advice has doubled in the last five years, with 2.6 million surveyed non-advised Australians indicating an intention to seek help from a financial planner in the next two years, up from 1.3 million in 2015, and up from 2.1 million in 2019, demonstrating the extent to which Covid 19 has catalysed advice demand.
1.2 Advice clients are highly satisfied
Advice clients satisfied with their adviser, with 94% scoring a 7 or 10 or higher2
FIGURE 5: CLIENT SATISFACTION WITH THEIR FINANCIAL ADVISER
Client satisfaction with Financial Adviser Rating out of 10
Source: Zurich/AFA3
1.3 Use of advisers remains relatively low
A longstanding and frequently quoted rule of thumb suggests 1 in 5 Australian adults use, or had used, the services of a financial adviser, and indeed this was borne out by FPA research from 2020. As expected, their research4 found the majority of those clients were in their wealth accumulation phase (35-55 y.o).
1.4 Intent/action gap
When it comes to seeking financial advice, the figures above show there is a clear gap between intent and action. This gap was reinforced by ASIC5 research which showed that the proportion of Australians intending to seek advice – 40% – was almost twice as high as those who actually did/do. (ASIC found this intention/action gap to be notably higher amongst younger age groups).
1.5 Barrier to seeking advice
The most frequently identified barriers to seeking advice, according to ASIC, are (in ranked order)
TABLE 1: BARRIERS TO SEEKING FINANCIAL ADVICE
Source: ASIC6
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References
03
Pathways to Excellence, Zurich/AFA/Beddoes Institute Whitepaper.
04
FPA Money and Life Tracker, October 2020.
05
‘Financial Advice: consumers really think’, ASIC Report 627, August 2019.
06
IBID.
