David Bell (left) and Andrew Inwood

Government services have a higher trust rating than financial advisers which might hold the key to bridging the advice gap according to research.

A survey conducted in partnership with the Conexus Institute (an independent entity philanthropically funded by the parent company of this publication) and CoreData Research found advisers scored a high level of trust (6.8 out of 10), but are less trusted than the Australian Taxation Office, MoneySmart and accountants.

The survey targeted 1,000 people who are at least “partially engaged” with their finances.

The most cited reasons for using an adviser is that it takes into account personal circumstances (54 per cent) and provided useful and relevant information (50 per cent). However, only 28 per cent stated it represented value for money.

When it came to not using an adviser, 44 per cent said they could not afford it and 29 per cent stated it did not represent value for money.

One in 10 respondents had previously used advisers but no longer did; 47 per cent stated it didn’t represent value for money and 40 per cent felt a reduction of trust in the service.

Conexus Institute director David Bell tells Professional Planner advice is highly regarded as a profession but is still out of reach for most Australians.

“That starts to paint this picture of advice as a luxury good and that’s the challenge the sector faces,” Bell says.

Two-headed solution

Bell says the Quality of Advice Review must achieve a significant cost reduction for advice as well as the ability to create scale in the industry.

“It can’t be one of those, it has to be both. Cost reduction would result in greater demand but that greater demand must be met by greater supply for this solution to work overall. That calls out the nuance of the problem.”

He added it seems unlikely advice from financial advisers will sufficiently fill the advice gap.

CoreData Research global chief executive Andrew Inwood says there are competing priorities with their own advocates and detractors.

“The Australian financial services system is complex, much more complex than other places around the world,” Inwood says. “This means it needs to be navigated and the navigation is probably done by a financial planner. Some people can do it themselves, but for a lot of people they need a navigator.”