Australians are increasingly reluctant to enter straight into a holistic advice relationship, according to the head of Investment Trends, and would much rather receive advice “piece by piece” until they’re comfortable committing to a partnership.
Speaking at the SMSF Association’s National Conference this morning on the Gold Coast, the research firm’s CEO, Michael Blomfield, revealed data showing that while only eight per cent of people preferred a face-to-face comprehensive model of financial advice, 30 per cent would rather receive advice on a piece-by-piece basis.
“Why aren’t people getting advice? The answer is really simple, they don’t like the advice model,” Blomfield said on a panel including SMSF Association head, John Maroney, Challenger CEO Jeremy Cooper and Rice Warner executive director Michael Rice AO. “They don’t want to go and have a meeting with a stranger for hours and tell them everything. That’s a very unnatural thing to do.”
Seventy-seven per cent of people indicated they were willing to transition from an ad hoc financial advice relationship to a holistic one at some stage, Blomfield said.
“Over time as they get more advice they will transition to full advice quite comfortably.”
Blomfield pointed out that while 3.6 million Australians are receiving financial advice currently, around twice that number were under advice before the introduction of the Future of Financial Advice reforms. He pinned the result on a combination of increased costs and dated advice models.
“You need twice the amount of money to get financial advice and half the amount of people are getting it,” he said. “It’s just not available to them.”
Blomfield noted that he had been specifically asked to wear the ‘black hat’ on the panel and speak to some of the negative aspects of retirement and advice.
Speaking to Professional Planner, Blomfield stood by his assertion that people want to receive ad hoc advice for a period before they commit to a financial planning relationship.
“It’s like entering a marriage without the dating,” he said.