CFS: advised Aussies more positive about financial future

Although the majority of Australians lack confidence when making decisions about their super, with cost-of-living being currently the greatest concern, three-quarters of those who were advised were positive about their financial future, according to the new research from Colonial First State (CFS).

CFS’ survey of more than 1,800 Australians who have never received financial advice and over 700 of those who currently have a financial adviser found striking differences between the two groups, even with equal net wealth and household income.

In a controlled sample of consumers with the same levels of wealth and household income, more than two-thirds (68%) of those with have a financial adviser said they were positive about their current financial position, compared to 45% of those who did not receive advice.

Although 75% of advised and unadvised consumers admitted that they were either ‘very concerned’ or ‘extremely concerned’ about the cost-of-living, 71% of advised Australians said they felt ‘very positive’ about their financial future, compared to just 44% of those who had never received advice.

The study also highlighted the human impact of a growing advice gap that needed to be addressed.

“Less than half of unadvised Australians feel positive about their financial future, which is quite alarming when you consider the detrimental impact that financial stress can have,” Kelly Power, chief executive of Colonial First State Superannuation.

“By comparison, the vast majority of those who have a financial adviser do feel positive, which suggests that advice has a tangible impact on how we feel about our finances despite concerns about the cost of living,” she said.

“When we asked more questions of both advised and unadvised consumers, we also found major gaps in both knowledge and confidence around investments and superannuation.”

The CFS survey also showed advised Australians had a decent understanding of investments, with 57% saying they had ‘very good or excellent knowledge’. According to the research, only less than one in three (30%) unadvised Australians were able to say the same.

Of those who currently have a financial adviser, 67% said they are confident to make decisions about their superannuation, compared to just 40% of those who have never received advice.

Advised Australians were also more open to taking investment risk with their savings (64%) compared to 38% of unadvised consumers.

“Most Australians who have never received financial advice aren’t confident making decisions about their superannuation. Considering how many Australians have a super account and how few have accessed advice, this is a wakeup call,” Power said.

“Compare that to the vast majority of advised Australians who are confident, and the advice gap is clear to see.”