DIYers shun advice: Research
There’s less need for financial advisers within the younger “do-it-yourself” generations, an international research firm says.
Tuesday, May 6th 2014, 6:00AM 2 Comments
by Susan Edmunds
Global analytics firm Cerulli Associates found 53% of advisers’ clients internationally were aged between 50 and 70. New Zealand advisers estimate the proportion of clients in that age group may be even higher in this country.
Cerulli associate director Kenton Shirk said advisers were finding it harder to attract young investors.
"The endless availability of online resources, as well as easy-to-use direct platforms is diminishing the need for advisors within the do-it-yourself generations."
Direct product providers had lower costs and advisers could not compete on priced, Shirk said.
He said Cerulli encouraged advisers to branch out beyond offering only asset allocation and retirement advice to attract new clients.
If they could team up with tax planning professionals, they would be able to offer tax and estate advice to clients.
Adviser Murray Weatherston said he would expect about half of New Zealand financial advisers’ clients to be aged between 50 and 70, and another 20% to be over 70.
But he said that was not surprising or a new development.
“It’s only older people who have investments – younger ones are tied up with house, mortgages and kids’ expenses.”
Jordi Garcia, of NZ Financial Planning agreed: “That would be a fair representation of my own clients and much of that I believe arises because, traditionally, many people only manage to get the mortgage, or at least a large part of it, paid off in their mid-40s to early-50s and find they have the cashflow means to then build for retirement. Until then, much of the family finances are focused on paying off the mortgage and paying for the kids. There’s often not a heck of a lot left over.”
Robert Oddy, of SiFA, said he expected the Cerulli statistics to be on the low side for New Zealand.
“I suspect the number is a higher percentage in NZ for that age group but have no definitive data. A lot of folk seem quite touchy about revealing what age band they are in.”
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