The Financial Advice Association Australia (FAAA) has revealed the overwhelming majority of advised clients trust their adviser to act in their best interests.
The 2024 Value of Advice Consumer Research report, conducted by MYMAVINS for the FAAA, canvassed nearly 1,200 Australians over 25 years old earning over $90,000 per annum or holding over $50,000 in investable assets.
Trust in financial advisers has reached an all time high, the FAAA uncovered, with 94 per cent of advised clients trusting their adviser to act in their best interests.
It also identified trustworthiness as one of the most important attributes of an adviser, alongside expertise and personalised advice considering financial goals.
“According to clients of financial advisers, the top three ways to describe their financial advice relationship are: trusted and transparent, reliable, and has good rapport,” the paper stated.
On the topic of trust, the FAAA debunked several myths about the advice industry, including the statement: “Financial advisers lack objectivity.” The claim harks back to the overhanging legacy of the royal commission, where consumers potentially associated advisers with product providers or misconduct.
In addition, the industry association found that 93 per cent of respondents said their adviser has assisted them in managing financial risks, and nine out of 10 said the benefits of advice outweigh the costs.
Approximately 90 per cent of advised clients also reported feeling financially secure and tangibly better off.
The top reported benefits of working with an adviser include:
- Improved financial wellbeing and peace of mind.
- Help to understand and simplify financial matters.
- Better confidence in financial decision-making.
- Improved confidence in the ability to achieve desired standards of living.
- Help to save time/effort organising and making decisions about finances.
Commenting on the findings, David Sharpe, chair of the FAAA, said: “The FAAA Value of Advice Consumer Research study makes clear the link between getting quality financial advice and having better quality of life and less financial stress.
“The study was undertaken at a time when many people are experiencing cost of living pressures, from their supermarket shopping to their mortgage. In this environment, it is fantastic to see that those who work with a financial adviser feel more financially secure and able to face current challenges.”
The findings coincide with recent research from CoreData revealing that the level of trust in Australian financial planners has bounced back to its pre-Hayne levels. In 2014, advisers were rated 5.5 on the trust scale, which then took a major hit in 2017 during the royal commission when trust levels fell to nearly three out of 10.
Since then, consumer trust levels in advisers have been on a slow upwards trajectory following the transformative event and have now returned to approximately 5.5 on the trust scale in 2024, CoreData found, nearly seven years after the royal commission.
Earlier this year, Money Management explored the trust equation in advice from both the consumer and adviser perspective.
Senior partner at Novigi, Michael Quinn, said negative stigma still hangs over the industry in some ways: “Financial advisers just want trust back, they want that chapter of the Hayne royal commission over and done with. They want to be recognised as someone who has survived that episode and who is here to do a good job.”
