An estimated 1.8 million Australians are currently receiving financial advice but that figure has declined by 100,000 per year for the last two years according to Investment Trends.
In its 2021 Financial Advice Report, the researcher says an estimated 12.6 million Australians now have unmet advice needs, with 40 per cent saying they can’t afford advice and more people leaning on their super fund for guidance.
“Over the past decade, the number of Australians relying on professional financial advice has fallen significantly,” Investment Trends says. “Perceived high costs and lack of investible funds remain the main barriers to seeking financial advice among those who have unmet advice needs.”
An estimated 3.2 million consumers are estimated to be open to engaging with a financial adviser in the next two years, the group states.
“The pandemic has prompted many to consider their financial situation and many Australians are now looking to expedite their decision to seek or consider advice options,” says Kurt Mayell, associate research director at Investment Trends.
“Over the next two years, there is likely to be significant demand for advice in areas such as tax reduction strategies, capital preservation, and ESG investing.”
The report notes several positive developments for advisers, including an increase in the proportion of advised clients who believe their position has improved as a result of financial advice; the average portfolio of these clients increased by $140,000, the researcher says.
“Loyalty has also increased among advised clients, with 75 per cent of advised clients intending to continue their existing adviser relationship, up from 62 per cent in 2020,” Mayall adds. “Honesty and integrity are key considerations that new advised clients look for when selecting an adviser by a significant margin, followed by independence.”