Survey confirms demand for independent advice

Despite the negative publicity and other fall-out from the Royal Commission a new survey has confirmed continuing strong demand for financial advice, particularly if it is provided by a genuinely independent adviser on a fully-transparent fee for service basis.

A survey undertaken by the Profession of Independent Financial Advisers (PIFA) carried out in the immediate aftermath of the Royal Commission, which canvassed the views of 75,000 people, has delivered a broadly positive message on the future of financial advice.

It found that while 57% of respondents were not currently receiving financial advice, two-thirds of respondents (62%) saw value in advice which the PIFA group suggested represented a massive opportunity for financial advisory service businesses.

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However, from the point of view of PIFA, the most important finding was that respondents saw most value in obtaining advice from advisers who were genuinely independent.

It found that 73% of respondents regarded an adviser’s status as being genuinely independent as being very important, while a further 14% said it was somewhat important. What is more, 84% of respondents said they would be more likely to engage in a long-term relationship with a financial adviser if they were genuinely independent.

The survey also confirmed strong support for a fee for service regime over commission-based remuneration, with 86% of respondents favouring a transparent fee regime.

The survey analysis by PIFA concluded on the note that “there is huge untapped potential for independent financial advisory opportunities in Australia”.

“Australians understand and value the benefit of financial advice from genuinely independent professionals which can be paid for via transparent fees.”

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The issue is not demand, it is the willingness and ability to supply.

Spot on. I’d query if this survey went further to highlight to the respondents the difference between truly independent firms versus those that are not aligned to any product but might take risk commissions, so can’t be deemed independent. I see no harm in those models to an end consumer.

I could do a survey and find many people would like advice. But I believe I would get a different answer if I ask "are they willing to pay $3000 for the advice". Since it does not mention money I am cautious about the value of the survey results.

Good news for those operating in that space. Sadly that's not many. We've got two issues, AMP and friends, the FPA included actually helped kill off independent advice and secondly for personal gain (and it's just too expensive to deliver advice) most planners decided to align themselves with a product owned licensee. I guess that's why we've got so much regulation and intervention because of the concentration of AMP and Bank owned licensees. Consumer want it but we can't deliver it.

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