The Financial Planning Association of Australia The Financial Planning Association of Australia

Global survey finds trust the biggest barrier for Australians in receiving professional financial advice

The survey also revealed that Australians working with a CERTIFIED FINANCIAL PLANNER® Professional show greater optimism and preparedness

Australians are twice as likely to turn to family and friends for information (41%) on financial matters and planning as they are to turn to a professional financial planner (23%), according to a global study by the Financial Planning Standards Board (FPSB), in conjunction with the Financial Planning Association of Australia (FPA).

The survey found that as well as relying less on planners and websites for financial information compared to people in other countries, 70% of Australians did not know who to trust when it came to arranging in financial matters, compared to 66% globally.

The survey was conducted by GfK, a global research firm with extensive experience in the financial services sector. Overall, 19,092 consumers who were either primary or shared household financial decision-makers participated in 19 territories around the world.

The results of the survey, which was conducted online during Q2 and Q3 2015, provided the following key findings for Australia:

  • Consumers lack confidence in achieving their financial goals. Compared to the global average, fewer Australians feel strong confidence in their ability to achieve their financial life goals (16% vs. 22% globally). Fewer Australians feel strong confidence in their “financial know-how (14% vs. 17% globally), and only 16% feel strongly successful sticking to their financial strategies, compared to 19% globally.
  • Like consumers globally, being debt free is also most important to Australians. However, Australians place a higher priority on being free of major financial debt (62%) and free of common consumer debt (59%) than the global average (55% and 54% respectively). Australians place about the same level of priority on being prepared for an unexpected financial emergency (49% vs. 52% globally) and on home ownership (53% vs. 52% globally).
  • Australian consumers are interested in financial planning services to help them get on track financially. In Australia, consumers consider budgeting and debt management (37%) and retirement planning (35%) to be the most helpful services. Globally, retirement planning ranks highest at 50%, while investment planning ranks second, at 38%. Budgeting and debt management rank third at 36%.
  • However, most rely on friends and family – not professional financial planners – for information on financial matters and planning. Four in 10 (41%) of Australian consumers rely on friends and family (compared to 44% globally), while another 30% rely on websites for financial information (compared to 41% globally). Fewer Australians (23%) turn to a financial planner, compared with 31% globally.
  • Knowing whom to trust is the biggest barrier to working with a financial professional. Most Australians (64%) say trustworthiness is a very important consideration when choosing a financial planner (compared to 68% globally), while 70% of Australians say they don’t know whom to trust (compared to 66% globally).
  • Those who work with a CFP® professional generally feel better prepared to achieve their financial goals. In Australia, 35% of consumers who work with a CFP professional strongly agree that they are confident they will achieve their financial life goals, compared to 24% of those working with any financial professional, and just 10% who do not work with a professional. This supports a global trend toward greater confidence among those who work with a CFP professional.
  • Consumers think financial planning should be regulated. While slightly more than half of the Australian respondents are unsure whether financial planning is regulated (54%), 83% feel it is very or somewhat important that it be regulated. That compares to 41% globally who are unsure, and 79% globally who feet it is very or somewhat important to regulate financial planning.

FPA CEO Mark Rantall, CFP®, said, “The survey reaffirms our own findings and validates our strategy of lifting education and professional standards of professional financial planners to help earn the trust of more Australians.

“With 5,500 CERTIFIED FINANCIAL PLANNER® professionals in Australia the FPA has an incredible opportunity to help Australians take control of their finances, be more confident and secure in their financial decisions, and have greater financial wellbeing,” Mr Rantall, CFP® said.