Advice can play a critical role in helping Aussies manage financial stress
When it comes to financial advice, there’s a common misconception out there. People tend to think it’s all about numbers.
How much extra can you tip into super. What return your investments are making. How much you’re going to have in retirement.
And sure, the dollar amounts are important. But financial advice is about so much more than numbers on a spreadsheet. An adviser is someone to confide in and collaborate with to achieve your financial goals.
So, what do Australians think of financial advice? And how does it affect their overall financial wellbeing?
Untapped potential
Recent research shows 11% of Australians have engaged an adviser over the past 12 months1. This means almost 9 out of 10 Aussies aren’t getting professional help with their finances and are at the mercy of bogus advice from other sources – both online and offline. Mates down the pub. Random tweeters. Dr Google.
More than one in four (27%) people say they have been exposed to financial misinformation – and worryingly, 31% have acted on the incorrect information.
And the top sources of financial misinformation? Yes, not surprisingly it’s social media (37%) and online searches (20%).
The top 5 barriers to seeking advice
So why aren’t Aussies seeking advice? Here are the top five factors putting people off.
46% feel the cost was too high.
34% think their finances are simple enough to manage themselves.
33% prefer making their own financial decisions.
24% see themselves as able to make financial decisions without advice.
And 20% simply don’t trust others to look after their finances.
Research shows Aussies in 2024 tend to be a little more focused on day-to-day issues rather than planning for the future – home loan repayments, savings plan and cost of living challenges are rating higher than retirement planning and super strategies. This reflects a very real gap – that many people are missing out on planning for the long term, including their retirement.
One challenge when it comes to financial advisers, is the trust gap among Australians - those who have engaged with an adviser are more likely to trust them than those who haven’t.
So how are advisers helping their clients…and what are Aussies not getting advice, missing out on?
3 ways advisers are helping Aussies feel better
1. Helping to set and achieve goals
It’s one of the most fundamental roles an adviser plays…setting clear, well-defined and achievable goals. And advisers are hitting it out of the park. The research shows Australians who have used an adviser feel a lot more organised. More of them have set clear financial goals and fewer of them haven’t got around to it, compared with Australians who aren’t getting advice.
21% of Aussies who say they have clear well-defined financial goals have used a financial adviser compared to only 9% of total Aussies.
2. Helping to ease stress…
Advisers are clearly helping people manage their stress levels more effectively. Only 16% of advised Australians feel severely or moderately stressed, compared with 30% of the general population.
…and manage daily stress levels
And almost two-thirds (64%) of people getting advice feel capable of managing daily financial stress well, compared with less than half (43%) of the total population.
3. And helping to improve overall financial wellbeing
From mortgage repayments to living costs, financial security and emergency planning, the research is unambiguous. Advised Australians feel significantly more positive about money matters and capable of handling any financial curveballs that might be thrown at them.
Improving mental wealth
The research measured seven key pillars of mental wealth – mental wellbeing, happiness, financial stress management and resilience, work/life balance, personal growth, community support and psychological richness.
And there’s a clear link between financial stress and overall mental wellbeing – 48% of Australians rate their overall mental wellbeing as good but only 22% of Aussies who are moderately or severely financially stressed say the same. And half of us are happy with our lives overall, but that jumps to more than three in four (76%) of financially secure Australians.
So, by helping Aussies get to grips with their finances, advisers can play a vital role in improving the nation’s overall financial wellbeing.
We can help you retire well
We can guide you through the complexities of retirement planning and discuss some of the innovative retirement income solutions that are now available.
Disclaimer: This information is provided by AMP Financial Planning Pty Limited (AMPFP) ABN 89 051 208 327AFSL 232 706, Hillross Financial Services Limited (Hillross) ABN 77 003 323 055 AFSL 232 705 and Charter Financial Services Limited (Charter) ABN 35 002 976 294 AFSL 234 665 Ph. 1800 021 466, all wholly owned subsidiaries of AMP and members of the AMP Group. Any advice contained in this document is of a general nature only and does not take into account the objectives, financial situation or needs of any particular person. Before making any decision, you should consider the appropriateness of the advice with regard to those matters. If you decide to purchase or vary a financial product, your advisers, AMPFP, Charter its associates and other companies within the AMP Group may receive fees and other benefits, which will be a dollar amount and/or a percentage of either the premium you pay or the value of your investments. Ask us for more details. If you no longer wish to receive direct marketing, please call your adviser.
Current as at October 2024
1 AMP Financial Wellness Report 2024
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