Many Australians feel professional financial advice is only for the rich.
Most Australian retirees are shunning professional financial advice during the COVID-19 crisis.
Allianz Retire+ surveyed 1007 current and prospective retirees in May 2020, finding 79 per cent of them had not sought financial advice during COVID-19.
“Only one in five retirees felt that they had easy access to professional financial advice and approximately a third felt financial advisers were ‘for the rich’,” the report says.
Nearly two-thirds of those without an adviser felt the service was too costly.
“We have to change perceptions of financial advice among retirees and increase access to affordable advice,” says Allianz Retire+ CEO Matt Rady. “The advice proposition is proven to be an integral part of providing individuals with confidence and certainty in retirement. Those who use an adviser told us they feel more confident and secure in their financial position”.
In YourLifeChoices’ 2020 Insights survey, which had 5477 respondents, 27.55 per cent said they did not feel sufficiently financially literate to handle their retirement income needs without professional advice.
Only 45.12 per cent of respondents said they had visited a financial professional to plan their retirement income.
Mr Rady said 68 per cent of those advised during COVID-19 were sticking to their financial plan.
“That means advice is definitely deterring people from making sub-optimal investment decisions based on fear or a lack of understanding.”
Anyone who gives financial advice must have an Australian financial services (AFS) licence. The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry recommended financial advisers would need to be individually registered in a similar way as doctors and lawyers.
moneysmart.gov.au advice for choosing a financial adviser:
Decide what you want from financial advice
This depends on your stage of life, how much money you have, and what you're trying to achieve. A financial adviser can help you make financial decisions and plan. This might include advice about budgeting, investing, super, retirement planning, estate planning, insurance, and taxation.
Choose the right financial advice for you
A financial adviser can give you general financial advice, which doesn't consider your personal situation or goals, or how it might affect you personally. Personal financial advice is tailored to your financial situation and goals, and is in your best interests. It can include help with one issue, such as how much to contribute to your superannuation; comprehensive advice and planning covering savings, investments, insurance, and super and retirement planning; and ongoing advice, which includes regular monitoring of your affairs.
Find a financial adviser
You can look for a financial adviser through the Financial Planning Association or the Association of Financial Advisers. Other options include your super fund or your lender or financial institution. Make sure you check the moneysmart.gov.au financial advisers register to check your adviser is licensed. And ensure you check the adviser’s Financial Services Guide, which shows the services they offer; how they charge; who owns the company; links to product providers; and their licence number. It should be on their website, or you can ask them for a copy.
Meet and compare financial advisers
When you meet an adviser, ask them about their qualifications, main client base, and specialty areas; what fees you will pay, how often and what you'll get in return; how they'll manage your money; how often you'll meet; what information you'll receive and how often; how they'll consult you on decisions; how they'll monitor and manage your investments; what commissions or incentives they receive from financial products, and how they'll choose products to recommend to you; who'll look after your account when they're away; how they'll deal with complaints (see problems with a financial adviser to learn about the complaints process); how to end your agreement with them (including any penalties or notice periods).
A good adviser will get to know you, keep you informed, and help you achieve your goals. They'll also discuss how much risk you're comfortable with.
moneysmart.gov.au also offers important advice on checking financial advisers; planning with advisers to achieve your financial goals; how much advisers should cost; and steps to take if you’re unhappy with a financial adviser.
Have you employed a financial adviser? How could professional financial advice help you?
If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.
Financial disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.