Financial advisers should not shirk their responsibility to restore consumer confidence in the face of market fluctuations and doomsday headlines.
This is the view of Association of Financial Advisers (AFA) chief executive Richard Klipin, who believes perspective is key when advising clients who are concerned or even deflated by global upheavals beyond their control.
“Problems in the eurozone, market fluctuations and political uncertainty, both domestically and overseas, all serve to shake consumer confidence,” he says.
“But if you look behind the veil, Australia is still very well positioned, particularly when compared with other countries, and Australians are in fact better off than they were some years ago.”
Klipin sites research from the AMP.NATSEM report Prices these days!, which revealed that overall average Australian families are better off to the tune of over $11,000 per annum than they were in 1984.
Those earning income from investments, typically self-funded retirees, have experienced income growth of $547 per week above their living costs in the same period, according to the research.
“It is normal for people to feel deflated and concerned at times like this, but the findings are interesting because they demonstrate how well off people actually are compared to how poorly they feel,” Klipin says.
“Cliché or not, Australia is still the lucky country. We are one of the few western nations experiencing economic growth; we have high levels of employment, a good quality of life and high wages.”
Despite his objections to the recently announced changes to superannuation, Klipin believes Australia still has an excellent superannuation system.
“Although the AFA believes the government must stop tinkering with superannuation, we also believe that with mandatory contributions increasing to 12 per cent, the standard of living for future generations of Australians in retirement is likely to be better than it has ever been before,” he says.
Klipin tasked financial advisers with communicating the good news to consumers.
“As client-first educators, advisers can lead discussions which focus on the positives and what’s right with our world,” he says. “Challenging periods in history, such as the one we are currently experiencing, actually increase the demand for financial advice.”
AFA president, Brad Fox, says that while the industry has been necessarily focused on regulation over the past few years, it is now time to get back to business.
“As financial advisers, it is time to move past the distractions of FoFA and fully focus on what we do best – providing quality education, understanding and advice to Australian consumers,” he argues.
“This is why financial advisers are critical to restoring confidence. It’s time to make sure you are seeing your clients and referral partners. People are screaming out for advice and leadership.”
I hear more instances these days of people burnt by “advice” they receive from the unregulated real estate agents…so where’s their compliance regime? Who monitors or shadow shops their conduct?
It is not the role of a financial adviser to restore consumer confidence that has been impacted by a several factors including the GFC, but also the total lack of political leadership in Australia and elsewhere.
If it were our role next we will see the ALP trying to introduce consumer sentiment measures as a compliance requirement of our industry.
Australia’s political leaders should start to focus on wealth creation rather than wealth redistribution.