Demand for financial advice doubles in five years

COVID-19 has seen greater engagement between advisers and clients, with an additional 500,000 non-advised Aussies saying they intend to seek advice compared to 12 months ago.

If your car engine sounds dodgy, you see a mechanic. If you’re unwell, you see a doctor. If you’ve got a tooth ache, you see a dentist. But what about when you’re looking to better manage your finances?

According to 2020 figures from research group Investment Trends, 2.6 million Aussies said they intended to seek help from a financial adviser over the next two years, up from 2.1 million in 2019 and double the levels seen in 20151.

Findings also revealed that COVID-19 had prompted greater engagement between Aussies and financial advisers where a relationship already existed2.

If financial advice is something you’ve been thinking about, we look at what else the 2020 Financial Advice Report from Investment Trends revealed, as well as some information from the Australian Securities and Investments Commission (ASIC) around why Aussies see advisers and what’s involved.

 

Demand for advice is on the rise

Talking about the report findings, Investment Trends Senior Analyst King Loong Choi said, against a backdrop of economic uncertainty and volatile markets, a record number of non-advised Australians realise they need assistance from a professional3.

“Among these potential advised clients, the pandemic has been a major catalyst, with 44% saying the COVID-19 situation had increased their likelihood of seeking advice,” he said4.

Choi added that Aussies also considered their super fund a viable source of financial advice, highlighting that one in six Aussies currently used advice services offered by their main super fund, with 37% of those who didn’t, saying they’d like to do so5.

Greater engagement between advisers and clients

The research also showed three in four financial advice clients had been in contact with their adviser to discuss the impact of the COVID-19 pandemic6.

“Most financial planners have proactively engaged with their clients during this period of volatile markets, and clients themselves acknowledge these efforts,” Choi said7.

The topics Aussies want advice on

There might be particular goals, events or circumstances that prompt financial advice, including unexpected situations like redundancy, death or divorce.

According to a survey by ASIC, the most common topics that participants had received advice on, or were interested in receiving advice on, were8:

  • investments (eg shares and managed funds) – 45%

  • retirement income planning – 37%

  • growing superannuation – 31%

  • budgeting or cash flow management – 22%

  • aged care planning – 18%

Other topics also included risk protection, self managed super funds, debt management, switching or consolidating super, and estate planning9.

What’s involved when you see an adviser

You may opt to receive simple advice on a particular issue, broader financial advice, or ongoing financial advice.

After you’ve discussed your goals, objectives and attitude to risk, your adviser can then provide you with recommendations and a product disclosure statement for any product they’ve recommended.

As part of this process, it’s important to understand how you will be charged and you’ll also need to assess whether the advice provided is right for you. After all, it is your money.

You should also check ASIC’s adviser register – a directory that provides details on an adviser’s experience, qualifications, history, the products they recommend and what licence they operate under.

Where can I go for further information?

Today’s financial landscape is becoming increasingly complex and Aussies are being asked to make more frequent and complex financial decisions, which is why seeking advice may help. Please contact us on 1300 882 166 if you seek further assistance .

Speak to your adviser, find an adviser, or if you’re looking for free financial counselling, you can also reach out to the National Debt Helpline on 1800 007 007.

Source : AMP September 2020 

Important: This information is provided by AMP Life Limited. It is general information only and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances and the relevant Product Disclosure Statement or Terms and Conditions, available by calling 1300 882 166, before deciding what’s right for you.

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