Advisers chosen for strategy over investments
Financial advisers are being chosen for their ability to help clients create long-term plans and not for their ability to create better investment performance according to a survey conducted by Legg Mason.
The Legg Mason Global Investment Survey, which surveyed 4200 investors in 20 countries, found that 59 per cent of Australian respondents stated the creation of a formal financial plan to achieve specific goals was the leading reason for working with a financial adviser.
This compared with 59 per cent of global investors who cited the opportunity to gain better investment performance as the top benefit of working with an adviser.
Legg Mason's Global Head of Distribution Marketing, Matt Schiffman, said the Australian results stem from the growing number of people reaching retirement and planning for their lifestyle needs over the next 20 to 30 years and how financial advice can assist in meeting those needs.
"Australians are less focused on tracking the annual performance of the investments their adviser recommends as a measure of success. For Australian investors, the experience of using an adviser is more about developing a long-term plan for financial independence," Schiffman said.
While Australian investors also stated they valued advice to help them avoid mistakes (46 per cent of respondents) and to have someone else manage their investments (43 per cent of respondents) the level of engagement with advice trailed the global average. The survey found that 27 per cent of Australian investors used an adviser compared to 36 per cent globally.
Schiffman said this created opportunities for advisers with global trends indicating greater investor confidence in market where investors receive financial advice.
"Given Australians' relative pessimism compared to global investors — only half of Australians think they will be able to maintain their current lifestyle later in life, compared to 75 per cent globally — advisers do have a key role to play in helping investors to feel more confident in achieving their financial goals."
Recommended for you
Advisers could find themselves unable to receive the fair market price of their advice as the Delivering Better Financial Outcomes legislation states superannuation trustees can reject deductions that are not charged on a cost basis.
Two advice professionals have shared five key takeaways as to how advisers can strengthen their communication with clients, especially at review time, in order to build deeper relationships.
The Financial Services Council has launched the Digital Advice Expert Group to support policy development around digital advice adoption and ensure greater accessibility for Australians.
MLC Asset Management’s managed account offerings have hit $2 billion in funds under management, underpinned by over half of financial advisers’ usage of the investment products.
