Philip Kewin

Consumers of financial advice benefit financially, emotionally and behaviourally,  but it’s almost impossible for the broader community to understand and appreciate these benefits until they experience it themselves first-hand.

These are the findings of a new white paper, Great Advice for More Australians, released last week by the Association of Financial Advisers (AFA) at its National Adviser Conference. The white paper was commissioned by the AFA and produced by CoreData. It is based on a survey of 946 people between 14 August 2018 and 3 October 2018.

AFA CEO Philip Kewin said the paper demonstrates that financial advice leads to better decisions which leads to better financial outcomes. “One of the key findings from the white paper was that in general, people who receive financial advice pay less tax, have little to no bad debt and have their money working harder for them,” he said.

Another key finding is that people who receive advice say they feel better about their financial situation. “Most people responding to the survey, 79.4%, either agree or strongly agree that they feel more peace of mind since receiving advice,” Mr Kewin said.

Receiving advice also leads to better financial behaviours. “One of the most important findings suggested by the white paper is that people who receive financial advice believe they are more in control of their finances than those who do not,” Mr Kewin said. “Of those surveyed, more than half, 50.2%, of those who receive advice believe they could survive financially for more than six months if they were unable to work, whereas only around a quarter, 26.2%, of those who do not said the same thing.”

The challenge for the advice profession now is to overcome two barriers to advice. “The cost of advice is a very real barrier for some people,” Mr Kewin said. “Another barrier is the erosion of trust in our industry. That said, it is encouraging that the White Paper reveals 72% of people who have never received financial advice would consider it. As a profession, we need to think about how we can work to overcome these twin challenges and deliver financial advice to a community that clearly has an appetite for it.”

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