Financial Planning

Advice curbs COVID-19 financial worries

COVID-19 advice

Australians who seek financial advice are less concerned with the financial impact of COVID-19 compared to those who don’t seek advice, a survey has shown.

Australians using a financial adviser are worrying less about the financial impact of the COVID-19 pandemic than Australians who do not seek financial advice, new research has revealed.

According to Fidelity International’s “Pulse Survey”, conducted in May, 52.8 per cent of Australians who did not seek financial advice worried about their finances during the coronavirus pandemic on a daily or weekly basis. By contrast, the proportion of those who did seek advice and worried about money on a daily or weekly basis was 36.5 per cent.

In addition, 20.3 per cent of advised individuals said they rarely or never worried about their finances, compared to 9.9 per cent of unadvised individuals.

“There’s quite a number who rarely, if ever, worry about money in the advised segment. If one-fifth of your clients are not worrying [or] rarely worrying, that’s an exceptionally good outcome,” Fidelity International Australia managing director Alva Devoy said during a webinar today.

The report, which surveyed 420 Australians, 200 of whom were advised and 220 of whom were unadvised, also showed the COVID-19 pandemic had a greater negative impact on the overall well-being, relationships, mental health and physical health of Australians who do not receive financial advice compared to those who do.

It revealed 48.8 per cent of those not seeking financial advice believed the pandemic had a detrimental impact on their mental health compared to 33.6 per cent of those who were advised, and 37 per cent of unadvised individuals believed COVID-19 had adversely affected their overall well-being compared to 28 per cent of those who were advised.

Financial advice also had a positive impact on people’s long-term goals, with 72.1 per cent of those receiving advice saying they felt ‘reasonably’ or ‘very’ prepared for retirement, compared to 29.5 per cent of those who did not receive advice.

“The pandemic has changed the way many of us live and work. For the more fortunate, this might provide opportunities to save or spend in a more considered way. However, for many, it is causing significant worries from job security to the impact of market volatility on savings,” Devoy noted.

“While we cannot predict how this current crisis will develop, there are steps individuals can take to mitigate the impact on their own finances, reduce their worries and improve their overall well-being. Taking a long-term view will be key.”

In January, Fidelity International’s “Value of Advice” report found financial advice was instrumental in leading to a stronger sense of mental, as well as financial, well-being.

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