The level of interest from consumers for financial advice has doubled over the past five years, driven in part by the COVID-19 pandemic, which has resulted in around 75 per cent of current advice clients engaging with their adviser about its impact.
These levels of interest and engagement with financial advice were tracked by research house Investment Trends and included as part of its recently released “2020 Financial Advice Report”, which found 2.6 million non-advised Australians intended to seek help from a financial planner in the next two years.
The report, based on a survey of 4501 Australian adults concluded in July, noted the number of non-advised Australians intending to seek help from a planner in the next two years had increased from 2.1 million in 2019 and doubled since 2015, when it was 1.3 million.
Investment Trends senior analyst King Loong Choi said the record number of non-advised people planning to seek advice came during a time of economic uncertainty and volatile markets, including the coronavirus pandemic, which was a driver for 44 per cent of people planning to seek advice.
Choi added that while potential clients would prefer to receive comprehensive advice over limited advice, with 76 per cent favouring comprehensive advice compared to 35 per cent favouring limited advice, when the cost of the former was factored in, the preference for the latter increased.
“Still, there are opportunities to transition those who want limited advice to a holistic advice offering since the vast majority of potential clients (61 per cent) are open to upgrading to comprehensive advice over time,” he said.
He pointed out engagement between financial planners and advisers, and their clients had increased, with 49 per cent of practitioners contacting clients and 24 per cent of clients initiating contact with their planner or adviser to discuss the impact of COVID-19 on their personal situation.
“Most financial planners have proactively engaged with their clients during this period of volatile markets and clients themselves acknowledge these efforts,” he said.
He noted proactive communication about the impacts of COVID-19 led to higher levels of client satisfaction and clients who had to initiate first contact rated their satisfaction with their planner less favourably (56 per cent) than planners who were proactive (73 per cent).
“As the lockdowns persist, all planners must take the opportunity to engage more closely with their clients through the most in-demand channels,” he said.
In light of the lockdowns, just one-third of advised clients still insist on receiving face-to-face review meetings, while the appetite for alternative, socially distanced regular reviews has substantially increased.
