Kelly Power
The majority of Australians don’t feel positive about their financial future and lack confidence when making decisions about their super, new research from Colonial First State (CFS) has found.
CFS recently commissioned a survey of 1,828 Australians who have never received financial advice (unadvised) and 708 who currently have a financial adviser (advised) and found striking differences between them, even where net wealth and household income are equal.
The research found that the cost of living is currently the biggest concerns for Australians: three-quarters (75%) of advised and the same proportion of unadvised consumers admitted they are either ‘very concerned’ or ‘extremely concerned’ about the cost of living.
In a controlled sample of consumers with the same levels of wealth and household income, more than two-thirds (68%) of those with have a financial adviser said they are positive about their current financial position, compared to 45% of those who don’t receive advice.
Looking beyond their cost-of-living concerns, 71% of advised Australians said they feel ‘very positive’ about their financial future, compared to just 44% of those who have never received advice.
Kelly Power, CEO of Colonial First State Superannuation, said the findings expose the human impact of a growing advice gap that needs to be addressed.
“Less than half of unadvised Australians feel positive about their financial future, which is quite alarming when you consider the detrimental impact that financial stress can have,” Ms Power said.
“By comparison, the vast majority of those who have a financial adviser do feel positive, which suggests that advice has a tangible impact on how we feel about our finances despite concerns about the cost of living,” she said.
“When we asked more questions of both advised and unadvised consumers, we also found major gaps in both knowledge and confidence around investments and superannuation.”
Of those who currently have a financial adviser, 67% said they are confident to make decisions about their superannuation, compared to just 40% of those who have never received advice.
The research also showed advised Australians feel they have a decent understanding of investments, with 57% saying they have ‘very good or excellent knowledge’. Less than one in three (30%) unadvised Australians were able to say the same.
According to the research, 75% of advised Australians demand as much choice as possible compared to 60% of those who have never received advice. Advised Australians are also more open to taking investment risk with their savings (64%) compared to 38% of unadvised consumers.
“Most Australians who have never received financial advice aren’t confident making decisions about their superannuation. Considering how many Australians have a super account and how few have accessed advice, this is a wakeup call,” Ms Power said
“Compare that to the vast majority of advised Australians who are confident, and the advice gap is clear to see.”