Advisers need to make their interactions with clients less complicated to improve financial literacy, Association of Financial Advisers (AFA) chief executive, Brad Fox says.
Speaking at the Money Management Life/Risk Remuneration Inside the New Framework, breakfast in Sydney this morning, Fox said that while "Australia doesn't rate well" on financial literacy, it was important for advisers to speak to clients in a way they can understand.
"We need to be less complicated in what we do," he said.
"We need to step up to the plate and speak to consumers in a way they feel comfortable with."
Fox said that if advisers failed to change the way they communicate with their clients the average financial literacy age of Australians would remain at 15.
Comments
I cant believe this article, Brad do you not think that we speak to our clients in a way that they understand what we are trying to tell them, the problem is NOT with the communication between adviser and client, BUT in the overly complex SOA's put together by groups of lawyers and compliance people, THIS is what makes the advice complicated for the client. I suggest you get real and maybe get out there and speak with some clients, I do not know if you actually give or have gave advice in financial planning, but this kind of article, I find, puerile.
Im with you 100% Stephen. This article is really condescending.
Every year the people in compliance keep adding disclosures to SOA's, and the advice documents just keeping growing in size.... somewhere in there the advice is there, but the people dont want to read the whole thing to find it.
I dont take on clients too dumb to understand what I am saying. I am not a charity.
It is not the job of a financial adviser to correct the errors of the education system.
A harsh but fair point and reality. Sometimes an adviser is better of walking away from a client who needs help, mainly because you know the client is going to cause you problems through lack of understanding at some point.
Lets be honest the "complexity comes from the ill considered laws O'dwyer rams thru in 4 weeks.
Good luck in the upper house princess.
Getting a little tired of the AFA and FPA telling us what we should do, you represent us, not the other way around.
As a Federal Politician, who was formerly a financial adviser and is opposed to the proposed regulations, told me yesterday - the AFA and FPA were the ones who sold us out. He is continuing to fight against the changes, but is fighting an uphill battle when even our "representatives"are working against us
The quotes in this article refer to the entire population of Australia and not just the people who have a financial adviser. It is referring to the fact that only 20% of the population seek financial advice. This means that 80% don't because of a reason which includes - they don't understand what value an adviser can add, they don't think they need advice, they think it is only for rich people, they don't realise they need insurance, they only want a small piece of advice not an entire plan etc.
Therefore if we want to tap into this untapped market and solve underinsurance we need to change the way we communicate to be relevant to more consumers. There also needs to be other ways to access the services to suit more people.
Having said all that, I 100% concur that we need the SOAs to be simplified - they waste so much time writing them and explaining them, they confuse clients and I would suspect stop them from actually reading them and understanding because a lot of it is just compliance and disclaimers.
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