Too many Australians are choosing to make financial decisions and conduct financial activity without the help of a financial planner, according to the latest research from Investment Trends.
In what represents a new area of research for Investment Trends, the company has looked at the appetite of Australian adults for self-service financial activities, and on the basis of 10,369 respondents, found that while most Australians understand the benefits of financial advice, they are opting not to retain a financial planner.
Commenting on the findings, Investment Trends head of research and wealth management, Recep Peker, said the findings suggested financial institutions needed to look beyond financial planning to engage with those choosing not to obtain advice.
He said the number of Australians actively using a financial planner sat at a substantial 2.4 million people with a further 1.1 million indicating they intended to use a planner in the next two years.
However, Peker said this meant 14.5 million people were unadvised.
"Non-advised Australians recognise they need help on financial matters," he said. "Eighty six per cent have concerns about their finances and 36 per cent say they have unmet financial advice needs, even though they would not consider turning to a financial planner for this."
Peker said non-advised adults collectively held 70 per cent of the total wealth in circulation, so it was vital that banks and super funds developed an effective direct channel proposition to meet their customers' and members' needs comprehensively.
The Investment Trends analysis suggested that robo-advice had the potential to become a fundamental tool for engaging people with their finances, but providers needed to look beyond entry level advice to fully realise this potential.
"Robo-advice tools can be a cost-effective method for banks and super funds to engage those who are not actively considering a financial planner or cannot afford one," said Peker.
"Most current generation robo-advisers are focused on investment selection, but these tools have the opportunity to really flourish by helping Australians with more than just their investment selection."