“Broad-brush” critics of the financial planning industry have had their disapproval blunted by a new survey, which found a growing number of consumers believed the quality of advice was improving.
The CPA Australia study, based on responses from 820 consumers, found 34 per cent of those who had been receiving financial advice for two or more years felt the quality of the advice had improved, while 36 per cent said the standards of specific recommendations and written information they received had also improved.
Just over half of those surveyed felt the quality of advice had not changed, while only one in 10 thought it had gotten worse.
Furthermore, of those participants who had changed the mix of advisers they used for their finances in the past two years, 37 per cent were making more use of financial planners, in comparison to accountants (32 per cent), and bank managers (13 per cent).
For consumers who did not have an adviser, not having enough money to invest, poor perception of adviser independence, and the price of advice emerged as significant deterrents.
CPA Australia financial planning policy adviser Kath Bowler said the findings, which had been produced to assess the impact of Financial Services Reform (FSR), should dispel some of the doubts about the credibility of the financial planning profession.
“I think that you can always find fault with any industry and pockets that aren’t working well… but I think the broad-brush bashing of the industry isn’t necessarily warranted because these results are showing there is a general improvement in financial advice,” she said.
According to Bowler, the results show some FSR objectives have already been achieved. “I think that’s certainly a message that’s coming out. There are still a lot of areas that need improvement… but I think this survey shows… advisers actually taking note of what FSR was about,” Bowler said.
The report also showed that 30 per cent of consumers still thought statements of advice were too complex.
“I think consumers would welcome a much simpler document, and that came through in the results,” Bowler said.
Consumers also indicated that they wanted the Government to spend less time addressing documentation issues, with 35 per cent of participants wanting greater regulatory emphasis on auditing, 25 per cent demanding more attention on training standards, and 24 per cent seeking a focus on complaints schemes.
