Price, not trust, main barrier to advice: FPA

The high cost of advice, driven up by regulatory barriers, is the main reason Australians are not seeking advice, according to Financial Planning Association (FPA) chief executive Mark Rantall (pictured).

Rantall made this statement following the release of Roy Morgan research that noted a lack of trust in financial planners was “probably one of the reasons that only a small proportion of consumers (around 25 per cent) use financial advisers when switching their super fund”.

However, Rantall asserted that financial planners were unable to provide “efficient pieces of advice” at low cost because of the heavily regulated and compliance driven industry, adding that this was the main reason Australians were not seeking advice. He said as part of the Future of Financial Advice reform consultation, the FPA was assisting Treasury to identify regulatory barriers to delivering advice with the aim of making advice more affordable and therefore accessible to more Australians.

“It is in our industry’s best interests to contribute [to] and assist the Government in removing these barriers to help improve the access to advice,” Rantall said.

He added that the lack of a savings culture also impacted the retirement savings of Australians.

“While we waste time arguing about who is seeking advice from which professional and whether or not consumers like financial planners, Australians are not saving enough for their future nor getting the advice they need to save adequately,” Rantall said.

“There is a serious lag in retirement income savings and this is the real issue to be addressed,” he added, calling on the financial services industry to work together to promote a savings culture.

“We must build trust and encourage more Australians to understand their finances and save for retirement. At the end of the day, we all have the same goal: to improve the finances of all Australians.”