Four out of every five people who consult a financial planner are satisfied with the advice they receive and most people who avoid seeing a financial planner do so because they don’t have enough money to make it worthwhile.
These are some of the findings of the 2004 Consumer Sentiment Survey of users and non-users of financial advice conducted by RMIT University on behalf of the Financial Planning Association (FPA).
The survey also found that people are still confused as to how they pay for advice, with 40 per cent of respondents thinking it was free.
“This finding suggests that, notwithstanding the increased transparency brought about through regulation and changed industry practices, many Australians are still not clear about what basis on which they pay for advice,” FPA chief executive Kerrie Kelly said.
She said the association would continue to work with members to make sure they are clearly disclosing fees and commissions to their clients.
In stark contrast to 2003’s infamous Australian Consumers’ Association / Australian Securities and Investments Commission shadow shopping report, the Consumer Sentiment survey found 82 per cent of the 1,067 participants who said they had used a financial planner were ‘satisfied’ or ‘very satisfied’ with the advice received.
Of the participants who had not used a financial planner, 36 per cent said it was because they didn’t have enough money to make it worthwhile and another 36 per cent said they did not need a planner anyway. Nevertheless, half of the non-users surveyed said they would seek a planner for advice – the most likely to ask being women, the employed and those earning over $50,000 a year.
The survey also found that use of financial planners has increased from 27 per cent to 40 per cent at the expense of other groups such as accountants. Half of those who had already seen an adviser claimed they were referred to them by a friend or family member.
“Overall the survey results underscore an increasing trend to the use of financial planners, high levels of satisfaction among users and significant opportunities for practitioners to expand their client base,” Kelly said.
