Recently, the financial industry in Australia has been under flak, thanks to the recent reports released by the Financial Services Royal Commission. However, Aussies still seek out financial advice from firms like Plenty, with consultations going up in 2018.
According to the 2018 Financial Advice Report from Investment Trends noted that approximately 2.1 million Aussie adults turned to a financial advisor or planner for advice on their funds, which is an increase from the estimated 1.6 million in 2017.
However, this increase in the number of Aussies turning to financial planners for advice was met with a decrease in the levels of trust in banks and financial planners, which the Financial Advice Report noted. During that same period, banks fell from their 5.5 trust rating in 2017 down to 4.8, on a ten point scale, while financial planners dropped from 5.1 to 4.8 in 2018 on the same scale.
According to the report, at least 40% of Aussies do not thing that financial services and banking industries are doing what they can in order to meet their obligations to ordinary, everyday citizens.
Most Aussies who use a financial planner or get consultations from firms like Plenty state that they’re still satisfied with the services they receive, but they’re not as willing to recommend it compared to before.
Senior Analyst King Loong Choi, Investment Trends, says that the impact of the Royal Commission on the trust of Aussies in the financial industry is very real, and that the advice industry must be preemptive in rebuilding lost trust among the country. He says that one of the most important things to do is to lift transparency in every aspect of the advisory process.
On the clients’ side, Choi says that the biggest hindrances to getting advice were not having the time to look for an adviser, the perception of high costs, and the belief in having insufficient wealth for advice.
Choi states that this makes it key that advice provides show the value of advice to potential clients, in a more familiar context; their time and money. He explains that potential clients need to be convince that they do need financial advice, and that they need it now, and the services they’ll receive will be worth the costs.