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Pandemic prompts more to consider engaging financial advisers

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Research house Investment Trends says its latest survey indicates Australians are increasingly aware they need financial advice to plan for their future, after experiencing the economic disruption of the pandemic.

About 61% of the 4001 adults surveyed in September say they have unmet advice needs.

Investment Trends says based on the findings, an estimated 3.2 million individuals are now open to using a financial adviser within the next two years.

“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,” Associate Research Director Kurt Mayell said.

“Over the next two years, there is likely to be significant demand for advice in areas such as tax reduction strategies, capital preservation, and [environmental, social and governance] investing.”

According to the researcher, the proportion of advised clients who believe their financial position has improved due to the efforts of their adviser increased last year. That in turn has seen the average portfolio of advised clients growing by $140,000.

Client loyalty has also increased, with 75% planning to stay with their adviser, up from 62% last year.

“Honesty and integrity are key considerations that new advised clients look for when selecting an adviser by a significant margin, followed by independence,” Mr Mayell said.

However, cost remains a significant hurdle for many Australians, Investment Trends says.

Two in five adults say advice fees are unaffordable, and more are reaching out to their super fund for guidance.

“Approximately 34% of Australians adults say that the cost of advice is a barrier of entry for them,” Mr Mayell told insuranceNEWS.com.au.

“For financial advisers, this means better articulation of the advice value proposition is paramount in informing potential clients what the service will cost, what they will get from the advice, and how they will benefit.”