Client appetite grows for one-off episodic advice
There is a need for advice businesses to offer flexible service models, with Investment Trends research suggesting over half of potential clients prefer one-off advice to meet their financial needs.
According to the firm’s latest Australian Financial Advice Report, a growing number of Australians are now open to seeking financial advice, but there is a shift in how they would like to receive it.
Surveying more than 6,500 advised, potential and non-advised clients, the report found client expectations and adviser engagement are shifting.
Some 16.4 million Australians indicate a need for guidance on finance-related matters, with 10.2 million planning to seek a financial adviser. However, of these potential clients seeking an adviser, over half say they would prefer one-off episodic advice rather than traditional, full-service models.
“It is abundantly clear that episodic financial advice – tailored to fit budgets and life circumstances – is what Australians want,” observed Olivia Beringer, research director at Investment Trends.
It echoes key recommendations of the Quality of Advice Review (QAR) for flexible, accessible advice models, she noted.
Last week, the second tranche of reforms announced by Financial Services Minister Stephen Jones also sought to outline how a new class of advisers (NCA) can help address more simple concerns, such as choosing an insurance policy or basic questions about retirement.
“Customers are calling for it, and organisations will be able to meet consumer needs through evolving business models. Once legislation is finalised, this will benefit all Australians,” Beringer said.
The report outlined a growing divide between the higher costs of comprehensive financial advice services and the affordability of episodic guidance, further supporting QAR’s proposed adjustments to meet consumers’ needs.
Inheritance and estate planning are the top areas where advised clients are willing to pay most for advice ($1,690), followed by buying a home ($1,270) and retirement planning ($970).
Interestingly, planning for retirement has also been identified among the key areas where potential clients need support (30 per cent), along with developing investment strategies (30 per cent) and managing tax planning (27 per cent).
“Australians are demanding advice that is both affordable and available when they need it,” Beringer said.
“Our data highlights a clear opportunity to inject greater flexibility into the industry, enabling organisations to offer targeted services that directly address consumer needs.”
In August, research from Adviser Ratings suggested one-off clients pose 'untapped opportunity’ for growth. Advisers are observing a rising number of one-off clients, it noted, with the proportion of this client segment rising from 20 per cent in 2020 to 25 per cent in 2024.
In comparison, recurring clients slightly dipped from 80 per cent four years ago to 75 per cent currently.
“While recurring clients provide stability, this growing segment presents an untapped opportunity for market expansion. While these clients might only seek advice once, they could be the key to unlocking long-term relationships and revenue,” the research house stated.
AUTHOR
Rhea Nath
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