Australians are becoming more concerned about their financial wellbeing and the demand for financial advice is changing. In December 2010, ASIC (The Australian Securities and Investments Commission) released Report 224, titled ‘Access to Financial Advice in Australia’.
The report identifies a number of key issues that adversely impact access to advice. They are:
- Cost of advice – a significant gap exists between what consumers are prepared to pay for financial advice and how much it costs industry to provide advice
- Scale of advice provided – Many Australians, particularly those who have never previously accessed financial advice, want piece-by-piece simple advice rather than holistic advice
- Consumer perceptions that advice is out of their reach – evidence suggests that some people do not seek financial advice because they feel their financial circumstances do not warrant advice
- Consumer mistrust of financial planners – lack of trust in financial planners to provide unbiased, professional advice limits the number of consumers who seek advice and the value they place of financial advice
- Access to general advice and information – the provision of general advice or factual information is less extensive than it could and should be. For many consumers general advice or factual information may be sufficient to meet their current advice needs
- Financial literacy – gaps in financial literacy especially among certain demographics and in relation to certain financial topics, limits some consumers’ engagement with financial matters and so stops them from seeking advice
In a nutshell financial advice must be affordable, easily accessible, easily understood and delivered in smaller portions.
Until next time!