Advice needs evolving from full-service to ‘episodic’: report

Unadvised Australians who are planning to engage a financial adviser would rather receive one-off, ‘episodic’ advice over a traditional full service, according to the latest research from Investment Trends.

The latest Australian Financial Advice Report for 2024, the 17th edition to be released, found that 10.2 million adults (48 per cent) intend to seek financial advice with over 50 per cent reporting a preference for one-off “issue-specific” advice, reflecting the importance of having affordable, quality advice made available to existing and potential clients.

Of the 21 million Australian adults that were considered as part of the research, 22 per cent (4.6 million people) were not planning to engage an adviser and had not expressed any unmet advice needs, 23 per cent (4.9 million) were also not planning to seek out advice but had reported unmet advice needs, and seven per cent (1.5 million) were currently receiving advice – of this group, over 85 per cent said they still have unmet advice needs.

The research also indicated that 16.4 million Australians want help or guidance on finance-related issues, including ensuring money lasts through retirement (30 per cent), developing investment strategies (30 per cent), managing tax planning (27 per cent) and navigating home buying (25 per cent).

Research participants also indicated their support of episodic assistance due to its affordability over comprehensive financial advice services, suggesting that the three areas they would pay the most for “human advice” include inheritance and estate planning ($1,690), buying a home ($1,270) and retirement planning ($970).

“It is abundantly clear that episodic financial advice – tailored to fit budgets and life circumstances – is what Australians want,” Olivia Beringer, Research Director at Investment Trends, said.

“Customers are calling for it, and organisations will be able to meet consumer needs through evolving business models. Once legislation is finalised, this will benefit all Australians.

“Australians are demanding advice that is both affordable and available when they need it.

“Our data highlights a clear opportunity to inject greater flexibility into the industry, enabling organisations to offer targeted services that directly address consumer needs.”