Nearly two-thirds of Australians face challenges in fulfilling financial commitments, with cash flow and expenses being a concern for under 50-year-olds.
The research, which found that 63 per cent of Australians struggled to pay for expenses over the last year, was uncovered by online finance platform Money.com.au.
Respondents aged 50 and above were least likely to have struggled to pay expenses in the last 12 months. However, only 31 per cent of 31-50-year-olds and 27 per cent of 18-30-year-olds reported the same.
The data comes amid the Government announcing it will adopt the bulk of the QAR recommendations, with the aim of making financial advice more accessible.
Money spokesperson and licenced financial planner Helen Baker tells Professional Planner that, for now, options are available to people who are seeking advice.
“Some firms still do what we call transactional advice,” she says, adding that most financial advisers also do not charge for their first meeting.
Transactional advice and no-charge first meetings allow people to at least meet with an adviser and learn whether they need to make any significant changes to their finances and budgets.
The research found 18–50-year-olds often sought advice for paying rent or mortgages and lowering utility bills and insurance premiums, highlighting the need for financial advice that falls outside the remit of investment product.
Tough times
The company surveyed 1,005 individuals and found that 63 per cent of them struggled to pay their expenses last year, while 11 per cent failed to pay for their expenses altogether. Some 78 per cent have made some or multiple financial decisions to help relieve financial stress.
With affordability being the primary barrier for Australians seeking financial advice, Baker says “the alternative to [seeking professional advice] is actually just doing research and [reading] books,” adding that financial knowledge is power.
But she explains that people should be “wary” while doing this.
“I went into Dymocks in Sydney, and every book in the finance section was not by a financial adviser, other than my own,” she says.
“My concern is there are a lot of people like finfluencers writing [about financial advice]. People are grabbing onto this, and it’s not appropriate advice for some of them.”
Baker says people need to understand foundational financial topics like superannuation and insurance in order to avoid making mistakes, like consolidating super while not making sure they have appropriate insurance coverage.
Digital advice has a place
Interest in digital advice has peaked in recent times, and research from Investment Trends last year found that younger people are more open to digital advice as a solution to their “less complex needs”.
Baker says financial advisers will use it to be more efficient and help to reduce the cost of advice.
“[It might also] help some of those at that lower level, [at the] beginning stage, get some sort of support, but I think what we need to be careful of is calling [digital advice] ‘advice’, as opposed to maybe more like information.”
