New Financial Advice Association Australia (FAAA) research has refuted the myth financial advice is something more beneficial to the rich than for median income earners with a vast majority of the latter who have sought advice reporting they feel more financially secure than those who have not received advice.
The representative body said the myth was exposed, alongside the premise advice costs more than it’s worth, in its “Value of Advice Consumer Research” report released today which found the recognition of the value of professional financial advice had increased over the past 12 months.
FAAA chair David Sharpe noted: “We often hear that financial advice is only for the rich, but the study shows that nine in 10 clients earning $120,000 or less per year who work with financial advisers feel financially secure which is higher than unadvised consumers on the same level of income”.
“Another myth is that financial advice costs more than it is worth, but again, nine in 10 clients say the benefits outweigh the costs.”
Speaking to media at the launch of the report, Sharpe added the FAAA wanted to dispel the misconceptions regarding the cost and value of advice as quickly as possible.
“What we’re seeing is those who aren’t on super high incomes and don’t have levels of high wealth are still getting a benefit and we don’t want people thinking ‘this is the luxury of the multimillionaire’,” he explained.
“We sit in front of the clients from middle income Australia, all day, every day and we don’t want those people scared off seeking advice purely because of this myth hanging around that advice is only for the [wealthy] suburbs.”
According to Sharpe the report also rejected the idea financial advisers were not objective in their dealings with clients with 90 per cent of those surveyed reporting this view was a hangover from events that took place in the past and they trusted their practitioner to act in their best interests.
“We have a best interest obligation. We have a code that’s now universal across all advisers. It is not just an ethical responsibility, it’s a legal responsibility that we put our clients’ interests first. And those who are seeing an advisor, they feel that very clearly.”
The Value of Advice report was based on a quantitative study by research firm MYMAVINS which carried out an online survey involving 1193 respondents from Australia, aged over 25 years and earning more than $90,000 a year or holding more than $50,000 in investable assets between August and September 2024.
