A vast majority of consumers who had received financial advice did not need to access their super early, according to research released by the Financial Planning Association (FPA), which also found they were better prepared for the financial impact of COVID-19 than those without advice.
The “Money & Life Tracker” research, based on online responses from 2000 people aged over 18 during September, found that of the one in five people who had received advice, 87 per cent did not need to access their superannuation early and reported little financial impact as a result of the pandemic.
The research found that among those respondents who used a financial planner, the majority were in accumulation phase and half of these advised people also stated they would not have done anything differently financially to prepare for the impact of the coronavirus.
This was in contrast to the 70 per cent of respondents without advice who believed they could have done something different to improve their financial position.
Creating a cash reserve was identified as an action that could have been taken by 20 per cent of respondents, while 17 per cent stated they should have controlled their level of impulse buying. Paying down debt and more timely access to the stock market were also listed as possible actions that could have been taken.
FPA chief executive Dante De Gori said the research showed two groups had emerged during the COVID-19 period, “those who lost income and were forced to dip into savings to get by and those who were able to save money either because they felt in control of their financial position or were cautious of what the future holds”.
“One thing that stood out was that those who had a financial planner by their side were able to cope more confidently than those who didn’t,” De Gori said.
The research found 13 per cent of respondents were now considering seeking financial advice, but another third of respondents would continue to act for themselves using help from family, friends and online resources. Another 20 per cent reported they would not seek advice as they believed they did not have enough assets to engage a professional adviser.
“The value of a financial plan has never been more important due to the experience of the pandemic and now that Australia is officially in recession after 29 years,” De Gori said.
“Those who are in receipt of professional financial advice are well guided and well engaged with their money and will make better decisions and get better results for themselves and their loved ones.”