Affordability remains the main barrier to Australians seeking financial advice with 12.4 million Australians having unmet advice needs according to research from Investment Trends.
According to the 2022 Financial Advice Report, Australians are willing to pay more for advice, but only $770 for limited advice – significantly lower than the above $3,300 cited from research by Padua Solutions for holistic advice.
The Investment Trends research also found newly-advised client numbers have outpaced client attrition for the first time in three years.
Despite increasing newly-advised clients, a growing number are considering stopping or switching advisers citing unhelpfulness (31 per cent), unclear fees (27 per cent), and slow responsiveness (28 per cent).
Over four in five clients want advisers to proactively support them throughout the advice journey and online portals have proven to be an effective means to demonstrate progress and keep clients engaged with the advice they are receiving.
Investment Trends research director Dougal Guild said advisers must sharpen their focus on key areas to shore up client loyalty and client acquisition.
“Understanding loyalty drivers is key to both curtail client attrition and maximise client acquisition,” Guild said in a media release accompanying the results on Thursday afternoon.
Some 91 per cent of Australian adults have concerns about their finances, with rising inflation front of mind (58 per cent, up from 42 per cent in 2021).
Digital advice better for younger cohort
The advice gap is the widest amongst younger adults with 81 per cent of Australians aged between 18-34 years old indicating they have unmet advice needs, and only 18 per cent have sought financial advice in the last twelve months.
However, the research found the less complex needs of younger consumers means they are more open to digital advice as a solution.
Guild said two in three Australians are open to using a digital advice tool to plug advice gaps, but most would prefer to use in conjunction with some form of human interaction.
“We may also start to see super funds having a larger role to play in addressing the advice gaps with a large number of members surveyed open to seeking advice from their super fund but many unaware of services available,” Guild said.
“A sizeable portion of members are also unaware of intra-fund advice solutions available as part of their memberships, presenting an opportunity for education.”
If Annual Fee Renewal Consent forms aren’t eliminated, expect billions more in lost super funds ending up in the ATO.
What happens when you impose Annual Fee Consent forms on working families; bureaucratic red tape that doesn’t exist in any other nation on earth. Unless they are eliminated, this disaster is set to worsen