Advisers should bank on young clients: Matthews

There are calls for financial advisers to promote themselves more effectively, after a survey showing very few young adults have used their services.

Thursday, January 22nd 2015, 6:00AM

by Susan Edmunds

A Westpac Massey Fin-Ed Centre survey released this week showed 6 per cent of 20 to 24-year-olds surveyed had used a financial adviser before making a major financial decision.

Not one had used a budget adviser.

Westpac general manager business bank and wealth Simon Power said it was a concern that so many were relying on advice from their family rather than professionals.

“This is fine if you have financially savvy parents – but that is not always the case. Bad financial advice can be become a debt trap perpetuated by a family environment where poor advice is given.”

The research showed 75% sought advice from their parents, 43% discussed the decision with friends and 49% researched using the internet.

Claire Matthews, of Massey University, said part of the reason for not using the services of an adviser could be that the respondents were confident about their financial situation.

“Or they might not have a lot of money and don’t think they’re the sort of person who should go to a financial adviser, they might think they’re for wealthy people or they may not be aware that financial advisers exist, if their parents haven’t used them or talked about them,” she said.

But she said advisers should do more to make themselves attractive to young clients, too.

“Advisers are in it to make money and how much are they going to make from young people?"

Matthews said while it might not be lucrative to deal with young people, it was an opportunity to build a long-term relationship that would pay off.

PAA president Bruce Cortesi said it was part of a wider problem of few New Zealanders not using advisers.

“Part of that is that it’s perceived to be expensive or difficult, or because of what’s happened in the financial markets. But not enough has been done to raise public awareness about what is financial advice, why you should get it and who can give you advice.”

The coming review of regulation should also take into account the need to keep advice simple and accessible, he said.

Regulation can over-complicate things.”

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