Advice costs divide Aussies: survey

Yasmine Raso

Senior Journalist, Financial Newswire

23 November 2022

A new Finder survey has revealed cost as a key issue that has prevented Australians from seeking financial advice, after only 16 per cent of respondents said they have a financial adviser or planner.

Of the 84 per cent that do not have an adviser, 42 per cent said they prefer to manage their own money but 39 per cent highlighted the costs of advice as too expensive.

“Cost is a key issue for 2 in 5 Australians who aren’t currently receiving financial advice,” Kylie Purcell, investing expert at Finder, said.

“In fact, this was one of the most common issues for all demographics, bar baby boomers.

“The reality is that the majority of Australians aren’t prepared to pay anything for financial advice. Even those that are willing to fork out for it don’t want to spend a lot.”

The survey also showed the average Australian is only prepared to pay $1,164 for financial advice, which is lower than the current average cost of advice in Australia. Just under one-third of respondents (29 per cent) who do not receive financial advice also told Finder they believe their net worth isn’t high enough to justify the costs of advice.

“Everyday Australians also use financial advisory services – they can be a huge help in creating wealth and in safeguarding against loss,” Purcell said.

“Many advisers offer the first consultation for free so it’s a good opportunity to shop around and find one that you’re comfortable with.

“Just make sure to always read the financial services guide (FSG) because this tells you what fees they’re charging and whether they have any ties to products they may be offering.”

Some respondents also flagged their distrust in financial advisers as the reason behind not receiving advice (17 per cent), while others also said they do not see the benefit in engaging financial planners (27 per cent).

“In the wake of the banking royal commission, it’s no wonder some Australians have lost faith in the advice sector,” Purcell said.

“Luckily, a lot of positive changes have been made since then, including the banning of commissions from most investment product recommendations and greater transparency around how fees are charged.”