With the financial services royal commission still fresh in the minds of many Australians, it’s not surprising that new research has revealed a high level of mistrust against the industry.
ASIC’s new report, Financial advice: What consumers really think, looked at research into consumer experiences of, and attitudes towards, financial advice and the advice industry.
It found that a significant number of Australians 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”, according to ASIC commissioner Danielle Press.
The research revealed that while 41 per cent of Australians do intend to get personal financial advice in the future, many will not actually proceed with obtaining such advice due to factors inclusive of the cost, considerations that it would not be worth it, distrust of financial advisers, or a perception that it would not be valuable to them.
While 27 per cent of Australians have received financial advice in the past, only 12 per cent of Australians have accessed advice in the last 12 months.
In addition, nearly one in two (49 per cent) online survey participants agreed that financial advisers “were more interested in making themselves rich than in helping their customers”.
A further 37 per cent agreed that “financial advisers did not generally have the customer’s best interests at heart”.
Despite the grim findings, Ms Press observed that “consumers who had recently received financial advice had more positive attitudes towards financial advisers than those who had not”.
“Moreover, even limited knowledge of industry reforms such as FOFA (Future of Financial Advice) appears to have improved consumer attitudes towards the sector,” she continued.
So who does use financial advice?
The research found that investment, inclusive of shares and managed funds, was the number one topic that Australians would like or seek out financial advice for, with retirement income planning and growing superannuation rounding out the top three.
Budgeting and cash flow management, aged care planning, risk protection, and SMSF were also commonly cited as areas people would consider advice for.
A significant majority of consumers who are seeking out financial advice do so because they feel advisers have expertise in financial matters and can recommend products that they could not normally find on their own, it was noted.
“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.
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