Advice gap in stark relief

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The latest FSC research has both good news and bad. The good news; financial advice is more important than ever. The bad news; not enough people are getting it.

Thursday, December 3rd 2020, 9:25AM 2 Comments

Richard Klipin

The third and final part of the Financial Services Council’s Money and You research series has revealed a similar outlook to research released in October by Financial Advice New Zealand. The research both shows the benefits of financial advice, and takes a hard look at the barriers that are stopping many New Zealanders getting it.

Richard Klipin, CEO of FSC says, “This research has shown that while 35% of Kiwis would consider taking advice, only 18% actually receive it, 40% don’t see any benefit of doing so, and 75% don’t recognise its positive impact on wellbeing.

“The main barriers to people getting advice is a perceived lack of wealth, and the affordability of advice; with 65.2% thinking they don’t have enough wealth or assets to warrant it, and 62.5% believing it’s too expensive.”

The research also revealed that many people are more likely to consider getting financial advice after major life events, particularly buying property (23.8%).

Although that figure has another side, as Klipin explains that “to have 75% of respondents signal that buying a property wouldn’t trigger taking any external advice is a real area of concern”.

What is absolutely clear from the research is that those who are receiving financial advice are seeing clear benefits of doing so.

Klipin says that “Those who are advised are delivered a 4% increase in investment returns, about 52% more in their KiwiSaver and save 3.7% more for their retirement than those who are unadvised.

“Importantly, advice is also clearly linked to overall wellbeing; with 46.6% of those who are advised rating their wellbeing as high or very high, and their relationships, physical and mental health all significantly improving.”

According to Klipin, the research has asked the financial advice community to ask themselves some hard questions around outreach and consumer education. “We need to do more to educate people. This includes promoting the value of financial advice and literacy to all New Zealanders; right across the wealth spectrum and at all stages of life.”

Ryan Bessemer, CEO of Trustees Executors who sponsored the research, said the Money and You research series has been invaluable to understanding Kiwis’ relationship with their finances.

“I’m confident that the financial community can come together, with the leadership of the FSC, to ensure Kiwis understand the financial and wellbeing outcomes that can be achieved with advice.”

Tags: Financial advice FSC Richard Klipin Trustees Executors

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