ASIC has released a consumer research report which looked at the attitudes of over 2,500 people in relation to their use of financial advisers, barriers to seeking personal advice and consumer attitudes towards the financial advice industry.
NIBA CEO, Dallas Booth says, “While the research was looking at financial planning and investment advice, the views and attitudes identified by the research could well be relevant for insurance brokers, and we recommend anyone interested in this area to carefully review the report.”
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.
Some key findings were:
- 41 per cent of Australians intend to get personal financial advice in the future, because they recognise advisers can offer significant expertise on financial matters;
- However the cost of financial advice is likely to be an issue for many;
- There is also a certain level of distrust of financial advisers, especially following the revelations of the Royal Commission.
Booth said, “It is pleasing to note that ASIC supports the concept that people making critical financial decisions should be able to have access to high quality advice, and they need to be confident that the advice will be in their best interests.”
ASIC Commissioner Danielle Press said, “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.”
This is an important message for insurance brokers believes Booth, “There is a strong recognition in the community that financial decisions can be critically important, and that the advice of experts is highly desirable.
“However, the experts must ensure they have the trust and confidence of potential clients, in order to become their trusted adviser on risk and insurance matters. Insurance brokers are already ahead of the game in relation to trust, confidence and professionalism, but they need to maintain that commitment to acting in the best interests of the client at all times.”
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 (also known as robo-advice) is still very low (one 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,” Press concluded.
The ASIC report (Report 627 Financial Advice: what consumers really think) can be accessed here.