Is traditional financial advice dead?

By Cameron Micallef

October 27 2020
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Australians are in need of affordable and accessible financial advice, with traditional expensive models likely to change, new research has revealed.

Research commissioned by online investment manager Six Parks has found that the pandemic, subsequent economic downturn and the rapid increase in short-term speculative sharemarket activity by consumers mean that more Australians need advice than ever before.

While Australians need financial advice, Six Park’s co-CEO, Pat Garrett, said there simply aren’t enough financial advisers in Australia to provide the various types of help that is required to meet the current and future anticipated consumer needs.

“The pandemic has shown us that Australians really do need help with their money. Aussies flocked to the stock market, many as first-time investors, when the market response to COVID created perceived buying opportunities. This saw a number of authorities such as ASIC issue unprecedented warnings to Australians regarding day trading and reinforced what we’ve known for a long time – people are keen to invest, but many don’t necessarily know how to do it effectively,” Mr Garrett said.

“There is also an increasing number of Australians experiencing financial hardship as a result of COVID who need support with specific aspects of their financial needs rather than holistic advice at this point in time.”

The CEO also pointed to face-to-face aspects of traditional financial services changing, with people more willing to receive advice through online services.

“The Australian financial advice industry has been relatively slow to move beyond paper and face-to-face client interactions, but the pandemic has rapidly accelerated the way both advisers and consumers have embraced the online delivery of financial advice,” Mr Garrett said.

“To many people’s surprise, digital delivery of such services has proven to be not only easy and efficient, but also highly engaging and personal when delivered properly.”

The CEO said COVID-19 could be the final push for the financial industry to transform in a way that meets the needs of consumers today.

“We’re going to see the majority of consumers using affordable, modular, tech-led solutions for individual aspects of their financial lives, allowing face-to-face advice to be concentrated on more complex and detailed situations,” Mr Garrett said.

About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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