Cost vs value: What is keeping Aussies locked out of advice?

Despite the high demand for professional advice in Australia, Iress’ latest report has revealed that cost and value perception continue to be primary barriers to accessing advice.

Based on a survey of 2,003 Australians over 18, The Big Lift report, produced in conjunction with Deloitte, found that just one in 10 surveyed Australians regularly seek out financial advice, while a third said they would like to do so but multiple barriers are keeping them locked out of accessing this service.

The most prevalent reason keeping Australians locked out of advice is the price with more than half (53 per cent) of respondents saying they are unable to afford professional advice. This is not only a barrier for face-to-face advice as 17 per cent of Australians say price is keeping them locked out of digital advice as well despite the cheaper rate.

Following this, 16 per cent of respondents said they are unable to access a professional adviser because they don’t feel it is worth the cost or their situation is too simple to justify getting advice. These concerns were less apparent when it comes to digital advice however, with 12 per cent and 8 per cent, respectively, indicating these factors as barriers.

On the contrary, the biggest issue when it comes to accessing digital advice, the report found, is trust with almost one in five (19 per cent) saying they don’t trust or understand how to use digital advice.

This is interesting given the trusted relationship clients have with their adviser is frequently cited as one of the top benefits to receiving face-to-face advice. A study of 151 high-net-worth (HNW) advised investors by Praemium and CoreData found that more than a third (36 per cent) value trust as the single most important factor in their adviser relationship, surpassing their investment performance (22 per cent) and strategic advice (13 per cent).  

Notably, a lack of perceived need wasn’t a prominent factor with just 6 per cent of respondents stating they weren’t accessing professional advice because they felt they didn’t need it, increasing slightly to 10 per cent for digital advice.

According to the report, people who don’t receive digital advice are nearly twice as likely to self-assess low financial capability compared to those who do receive digital advice.

“Despite the clear benefits, financial advice remains inaccessible to most Australians.”

The report added: “The financial advice industry is undergoing a period of rapid change. As the way Australians access and consume financial advice changes through an evolving channel mix, providers of financial advice have an opportunity to adapt, leverage new technologies and engage with a broader range of consumers in terms of their increasingly complex and diverse financial needs.”

As digital advice technology continues to improve, Iress chief executive – wealth APAC, Kelli Willmer, said technology has given advisers an opportunity to reach more Australian and expand their service offerings.

“With 63 per cent of Australians under-40 being open to digital advice solutions, embracing hybrid models, AI, and chat-based tools can help scale advice efficiently and meet clients where they are. At the same time, offering financial education, simplified products, and coaching programs can build client confidence and unlock new revenue streams.”

Speaking at an Iress event in Sydney on 27 November, Deloitte Access Economics partner John O’Mahony said discussions regarding digital and AI solutions have become difficult to avoid in the advice space as the ecosystem evolves on the back of growing demand from younger Australians.

"If you think of all of the unmet need for financial advice in this country - of 11.8 million people - it's unlikely that we're going to service that just with the traditional business model, and financial advisers have already changed with that regard.”

Financial knowledge 

Meanwhile, 57 per cent of surveyed Australians over-55 are fast approaching retirement having never undertaken retirement planning, and almost half of Australians don’t actively self-educate themselves about financial management.

Conversely, advised Australians are typically more financially proactive with this demographic being 39 per cent more likely to plan for retirement than their unadvised counterparts, while also being more inclined to seek financial education (24 per cent) and reprice or refinance their mortgage (20 per cent).

At the same time, many Australians are overestimating their financial capability with just over a quarter (26 per cent) rating themselves as having low financial capability, however, the report indicates that this is actually as high as 59 per cent.

“This mismatch can lead to poor financial decisions, increased risk, and missed opportunities to build essential financial skills. Conversely, those who underestimate their abilities may be missing out on financial products or investments that could benefit them,” the report said.

“Bridging this gap is essential for fostering confident, informed financial behaviour, building resilience, and promoting financial wellbeing. Such attitudinal gaps may play a greater role in holding back financial confidence than lack of financial knowledge itself.”

While the report flagged several avenues for improving Australian’s financial capability, whether through better financial education at school and in the workplace, it noted access to financial advice as a key driver of improvement in this area.

Recognising the concerns of some financial advisers, O’Mahony said the report showed Australians with a high level of financial capability often fuels an interest in accessing professional advice, creating an opportunity for businesses.

“That's a good thing for the sector, and it suggests that financial advisers who are able to lift capability and engage in education activity, they're not pushing away customers by helping them. They're actually creating more of a pipeline as well.