New Research: More Kiwis Get Money Advice At The BBQ Than From Financial Professionals
New research released today has found that Kiwis are more likely to seek financial advice from family and friends around a barbecue or dinner table than seek the help of a professional adviser.
Friends and family are seen as the most trustworthy source of advice and broadly as competent as financial planners and banks.
As part of Chartered Accountants Australia and New Zealand’s (CA ANZ) ‘Future of Advice’ report, the survey found that changes in population, household wealth, technology, increased regulation and consumer preferences are changing the way we look at advice.
However, despite some challenges, expert advisers remain well placed to deliver financial advice to New Zealanders into the future.
The report shows that those seeking advice are, on average, older and wealthier and with more females.
And it also shows that financial advisers have their work cut out for them with only 40 per cent of survey respondents seeking professional advice from practitioners who help individuals make important decisions about money.
The financial advice landscape is also becoming increasingly complex, intensified by more socially and environmentally responsible consumers who are also more technological savvy.
CA ANZ Thought Leadership and Research Leader, Geraldine Magarey said the report shows advisers must rise to meet both people’s changing financial needs and the environments in which we operate.
“Our survey has found people are not thinking or talking about their finances as often as many might expect,” Ms Magarey said.
“It has also revealed surprising results about who is looking for advice and where we get that advice from.”
“The most trusted source of information comes from family and friends around a barbecue, or dinner table, followed by accountants.
“And while family and friends are considered a good source of advice, accountants are viewed as the most competent and trustworthy – above other professions, including bankers and lawyers,” Ms Magarey said.
The report found that as people get older, and the need for advice transitions from tax and mortgage to planning for retirement, the importance and value placed on professional financial advice increases.
“This is unsurprising – as we get older, and more risk averse, we want to know they’ll have enough money to retire comfortably,” Ms Magarey said.
The report shows people on lower incomes tend to think their situation is not complicated enough to warrant financial advice.
“This is an interesting comparison – lower income earners view financial advice in the prism of solving their problems while higher income earners look to advice to proactively look for opportunities to grow investment or to understand an issue,” Ms Magarey said.
“It’s up to the industry to change that misconception and ensure expertise can be used help people improve their financial situations.”
Another key report finding is the fact that more women are seeking advice as they become more involved in household financial decision making and on average are living longer than men.
US research of married women showed 11% of baby boomers are likely to be the main decision maker on financial issues, compared to 22% of Gen X women and 38% of Millennials.
“There is no doubt technology will play a major role in the way advice is delivered, but the Future of Advice report finds that we aren’t ready to move away from face-to-face contact with our advisers just yet.
“In fact, the survey found only 12% of people have heard of robo advice, and a significant percentage are not comfortable with the idea of receiving financial advice from a computer,” Ms Magarey said.
Other key points
- A desire to retain control is among the main reasons for not seeking advice.
- Kiwis also want advice to be more affordable and personalised.
- Advisers want regulators to get the balance right for financial services and products and not reduce flexibility and add compliance costs that have to be passed onto consumers.
- Australians and New Zealanders, in the main, report positively after receiving advice. Four in five say they feel more informed.
- 54% of respondents had not considered changing their household budget management, while 56% had not thought about changing their mortgage and banking in the past 12 months.
- The CA ANZ survey was conducted in August 2019 by independent market research firm Dynata.
- Over 1,700 responses were collected and used for this report.