Popular money expert and chair of Financial Literacy at Macquarie University, Paul Clitheroe, has championed the cause of financial advisers and highlighted the struggle they have in bridging the advice gap for non-wealthy Australians.
Speaking at an industry event hosted by the Financial Planning Association recently, Uncovering the Value of Financial Planning Advice, Clitheroe said that according to the current regulatory framework advisers are restricted to only helping high-net-worth individuals.
“That satisfies [roughly] the top 10 or 20 per cent of the population of Australia,” Clitheroe said. “What do we do for the other millions of people who want to talk about everything from their credit cards, to investing a hundred dollars, to talking about [whether they should] put a thousand dollars in super or [towards paying off their] mortgage? That remains the challenge.”
Clitheroe’s statement was reiterated by FPA chair Marisa Broome, who lamented that financial planning was beyond the reach of most Australians.
“We want more Australians to seek financial advice but to do that they need to be able to access it and afford it,” Broome said. “I passionately believe that helping Australians to build their financial capability and understanding is critical not just to them individually but to the nation.”
Panellists on the session also included CEO of consumer group CHOICE, Alan Kirkland, who explained how important tailored advice was to some consumers. For others, he noted, a nudge in the right direction might be more appropriate.
“It’s about really assessing when advice as provided by a financial planner is actually the right approach for a person and if it is, whether they need one-off advice or ongoing advice. Because sometimes, good advice is about giving people the skills they need to make decisions themselves through their day to day life,” Kirkland said.