FAAA publishes myth-busting research on World Financial Planning Day

World Financial Planning Day, taking place today, also sees the Financial Advice Association Australia (FAAA) release new research aimed at busting some financial advice myths.

According to the Financial Planning Standards Board (FPSB) Value of Financial Planning Research 2023, conducted in collaboration with research consultancy MYMAVINS, clients who work with a financial adviser say they are better off, with half of all clients highly satisfied with their wealth versus just a third of unadvised consumers.

Four in five clients of financial advisers also said they feel financially secure and that their finances are tangibly better off.

Among the myths the research sought to bust is the idea that financial advice is only for the rich, with the FPSB finding that three in four clients earning $120,000 or less per year who work with financial advisers felt financially secure and confident, which is higher than unadvised consumers on the same level of income.

With around 90 per cent of Millennials who work with a financial adviser conceding that financial planning has left them better off financially, the FPSB explained that the idea that financial planning is only needed at retirement is also a myth.

Additionally, while many believe financial advice costs more than it is worth, around 80 per cent of clients said the benefits outweighed the costs. Nine in 10 also said they trust their financial planner to act in the client’s best interests – a clear indication that advisers don’t lack objectivity.

“Advice professionals and their clients have always known that these longstanding myths that have been regarded as public truths are false,” said FAAA chair David Sharpe.

“But with these research findings, the high value that financial advice can bring is undeniable. Not only do clients who work with a financial planner feel they are better off, they also feel more at peace with their finance, which is especially important as family budgets are strained by the rising cost of living.

“As we celebrate World Financial Planning Day, it is important that all Australians understand the benefits that financial advice can bring into their own lives.”

The research also includes the FAAA Value of Advice Index, aimed at showing the difference between those who do work with a financial planning professional and those who do not. It is measured across components including quality of life, financial confidence, and financial satisfaction.

“Across those three components, the index showed that financial planning clients experience a higher quality of life, greater financial confidence, and more financial satisfaction than those who are unadvised,” said Mr Sharpe.