Confusion a barrier to attracting new clients

The study by consultancy BusinessBlades – which surveyed 4,000 consumers not already using a financial adviser – found that only five per cent of respondents said they would go to an adviser to help establish and achieve their financial goals.

Two per cent of respondents said they would seek insurance advice from an adviser while 12 per cent would seek investment advice.

BusinessBlades co-founder Neil O’Grady said the results were “alarming” and indicated that many consumers were confused about the benefit of financial advice.

“Financial planners need to look at their value propositions differently,” he said. “As an industry, we have to look at how people perceive what we do.

“We have to do more work on the scope of services offered and the benefits people are going to get out of using them.”

The survey also showed 22 per cent of Australians would only seek financial advice following a particular event, like an inheritance or a redundancy.

“Consumers want advice which is specific to an identified need, such as retirement or coming into inheritance,” Mr O’Grady said.

“If you want to engage with the 80 per cent of Australians who aren’t currently using a financial planner, talking up holistic advice is not going to win them over.”

Wealth was also perceived as an obstacle, with 27 per cent of respondents indicating they believed they did not have enough money to make visiting an adviser worthwhile.

Meanwhile, the industry’s poor reputation was an issue for a minority of respondents, with nine per cent indicating they would not trust an adviser with their finances.