What barriers are stopping consumers seeking advice?

The most-common barriers to seeking advice are its costs or consumers’ preference to do it themselves, varying between those who are retired and pre-retirees.

As part of Financial Planning Week, taking place from 3-9 October, the Financial Planning Association of Australia (FPA) commissioned MYMAVINS to research over 1,000 people, over 400 of whom were advised, on the value of advice.

For those who were over-65 who did not receive advice, they were more likely to believe they could do it themselves. Some 41% said they preferred to do it themselves, 37% said their circumstances did not justify the need and 33% said they could manage their own affairs.

This was echoed by the statistic that 66% of over-65s rated their financial ability as reasonably or extremely well compared to 51% of under-65s.

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However, for those who were under-65, the biggest barriers related to the cost of advice instead. Almost a third said advice was unaffordable or it was too expensive for the value provided and 26% said their circumstances didn’t justify the need.

The FPA said this meant there was a clear opportunity for younger pre-retirees particular as the Quality of Advice Review was exploring how the cost of advice could be brought down. Research by CFS found the number of advised clients with over $500,000 had tripled since 2019 while lower-balance clients had declined from 40% to less than 20% over the same period.

“Unadvised Australians under 65 years are more likely to envisage the benefits of financial advice, envisage wellbeing benefits and be more to seeking limited scope financial advice than their older counterparts.”

Services sought by under-65s were ways to invest their money, growing and managing wealth and planning for retirement while older consumers wanted help on aged care issues and maximising aged pension entitlements.

On the other hand, areas such as estate planning, retirement income streams, managing cashflow and debt and tracking lifestyle goals had less interest from consumers, regardless of their age.