The number of Australians with unmet advice needs now represents three in five people, with more than 3 million people considering using a financial adviser within the next two years, according to Investment Trends.
The research firm stated its “2021 Financial Advice Report”, based on a survey of 4001 Australian adults in September, found 61 per cent of those surveyed had unmet advice needs and an estimated 3.2 million individuals are considering some form of advice in the next 24 months.
Investment Trends associate research director Kurt Mayell said: “The pandemic has prompted many to consider their financial situation and many Australians are now looking to expedite their decision to seek or consider advice options.
“Over the next two years, there is likely to be significant demand for advice in areas such as tax reduction strategies, capital preservation and ESG (environmental, social and governance) investing.”
Despite this estimated demand, the report found the number of Australians relying on professional financial advice had fallen by 100,000 each year since 2020 and currently sits at an estimate of 1.8 million using some form of advice.
Investment Trends noted the perceived high cost of advice and lack of funds to invest are still the main reasons people do not seek advice, but when they do so many turn to their superannuation fund.
“When it comes to super, Australians with unmet advice needs increasingly say they would turn to their super fund for advice, with roughly 1.5 million members approaching their super fund representative for advice over the last 12 months alone,” the research firm stated.
“Advice relating to additional super contributions and changing investment options were the most common inquiries. The top barriers holding back members from seeking advice from their fund are unclear costs and a lack of awareness about what advice topics that members have access to.”
Mayell said among those people who do currently receive advice, there was an increase in those who believe their financial position had improved due to the advice, with the average portfolio of advised clients growing by $140,000.
He added this had led to increased client satisfaction for financial advisers and super fund representatives across all key service elements measured.
“Loyalty has also increased among advised clients, with 75 per cent of advised clients intending to continue their existing adviser relationship, up from 62 per cent in 2020. Honesty and integrity are key considerations that new advised clients look for when selecting an adviser by a significant margin, followed by independence,” he said.