Value of advice unproven to consumers
The recent political wrangling around financial advice reforms as well as moves to create an adviser register have passed over the heads of most consumers who have yet to be convinced of their relevance or usefulness according to Adviser Ratings campaigns and communications director Christopher Zinn.
He said the wrangling around the amendments to the Future of Financial Advice legislation played out as a political and economic issue for many consumers leaving many of them unsure as to what it meant while also damaging perceptions around the quality and value of financial planning advice.
"Even when people are aware that most planners are good at what they do and are up to the task the events of last year have disconnected people from advisers and paralysed them into not taking action when they should," Zinn said.
"Consumers are avoiding what has to be done by seeking advice and the value of advice has been negated so that the impression has been created that they cannot be trusted with $20, let alone $20,000."
Zinn said moves were in place to restore confidence including the adviser register being created by the Australian Securities and Investments Commission (ASIC) but this needed more work to answer the questions which were driving consumer interest and sentiment in the advice sector.
"There are questions around why the fees and charges of advisers on the register will not be present and it would serve consumers better if they were present on the ASIC register instead of being hosted on every adviser's own website," Zinn said.
"There should be some indication as there is consumer demand for this type of information and its provision would move advisers in line with many other registers of professionals."
He also warned industry participants not to overlook consumer demand for change stating that it had the power to move quicker than governments could and reflected dominant attitudes faster than industries were able to respond.
"This is not to say that regulation and governance are not important in bringing widespread change but when consumers start voting with their feet it sends a clear message that a market has shifted."
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