2021 Financial Advice Report – COVID has stoked demand for financial advice, but affordability remains an important barrier


COVID has stoked demand for financial advice, but affordability remains an important barrier

  • The pandemic has prompted many Australians to consider seeking advice earlier than planned.
  • An estimated 12.6m Australian adults have unmet advice needs.
  • Two in five Australian adults say advice is out of affordable reach, and more are reaching out to their super fund for guidance.

Leading research firm Investment Trends has launched its 2021 Financial Advice Report, an in-depth study of Australians’ attitudes towards financial advisers, their changing advice needs, and how financial institutions can support clients across the wealth spectrum.

The latest Report highlights the increasing number of Australians who say they have unmet advice needs (61% cite this), while an estimated 3.2 million individuals are now open to using a financial adviser within the next 2 years.

Over the past decade, the number of Australians relying on professional financial advice has fallen significantly. Presently, an estimated 1.8m use financial advice but this figure has declined at a rate of 100,000 per year since 2020. Perceived high costs and lack of investible funds remain the main barriers to seeking financial advice among those who have unmet advice needs.

“The pandemic has prompted many to consider their financial situation and many Australians are now looking to expedite their decision to seek or consider advice options. Over the next 2 years, there is likely to be significant demand for advice in areas such as tax reduction strategies, capital preservation, and ESG investing,” said Kurt Mayell, Associate Research Director at Investment Trends.

Positively, the last year has seen an increase in the proportion of advised clients who believe their financial position has improved due to the efforts of their financial adviser, with the average portfolio of advised clients growing by $140,000.

This outcome has led to increased client satisfaction for their financial adviser and super fund representative across all 18 key service elements measured. Still, advisers are increasingly required to play the role of educator and financial coach across a growing range of financial products.

“Loyalty has also increased among advised clients, with 75% of advised clients intending to continue their existing adviser relationship, up from 62% in 2020. Honesty and integrity are key considerations that new advised clients look for when selecting an adviser by a significant margin, followed by independence,” explained Mayell.

When it comes to super, Australians with unmet advice needs increasingly say they would turn to their super fund for advice, with roughly 1.5 million members approaching their super fund representative for advice over the last 12 months alone.

Advice relating to additional super contributions and changing investment options were the most common inquiries. The top barriers holding back members from seeking advice from their fund are unclear costs and a lack of awareness about what advice topics that members have access.

About the report

The Investment Trends 2021 Financial Advice Report provides a detailed analysis of the Australian financial advice market, examining attitudes towards financial advisers, current and future intended use of advisers, advice needs, and how financial institutions can support customers across the wealth spectrum.

Based on a survey of 4,001 Australian adults in September 2021, the Report is the largest and most comprehensive independent study of the Australian financial advice market.

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