Demand for advice saw good growth over the four years to 2013, even as the industry grapples with how best to provide limited advice, according to Investment Trends.
The ‘2014 Advice and Limited Advice Report’ showed that while demand for advice reduced from three million to 2.4 million over the four years to 2013, the number of active financial planner clients made ground again in 2014, reaching 2.5 million.
Investment Trends analyst, King Loong Choi, said the rise in demand was accompanied by clients feeling they are getting more value out of their relationships.
“The increase in demand for financial advice is partly driven by Australians becoming more concerned about their finances,” Choi said.
“In particular, Australians are more worried about the adequacy of their retirement savings, the impact of inflation, and managing their cash-flow.”
The survey of 6256 adults showed cost remains a barrier to getting advice, with many preferring limited advice. But they are still open to getting comprehensive financial advice in the future.
But satisfaction with limited advice providers is 11 per cent lower than with comprehensive advice delivered by a financial planner.
Choi said clients who receive limited advice from their bank or super fund expect the bank and super fund to keep in touch with them occasionally, meaning the relationship is not as “one-off” as the industry thought.
“Financial planning businesses need to consider developing a multi-pronged advice delivery approach to both help attract and retain clients,” said Choi.
“Planners have already started to recognise this opportunity, with half saying they intend to provide more limited advice in 2015.”
