World Financial Planning Day is an opportunity to celebrate the good that financial advice provides for all Australians, says the Financial Advice Association Australia (FAAA), as it releases new research busting some long-standing misconceptions about advice.
The Financial Planning Standards Board (FPSB) Value of Financial Planning Research 2023, conducted in collaboration with research consultancy MYMAVINS for World Financial Planning Day, found that clients who work with a financial planner say they are better off, with five-in-10 clients of financial planners highly satisfied with their wealth versus three-in-10 unadvised consumers.
Further, clients of financial planners are more likely to experience financial peace of mind, with four-in-five clients saying they feel financially secure and that their finances are tangibly better off.
The study also addressed long-standing myths about financial planning that have prevented many Australians from taking the next steps in seeking financial advice, including:
MYTH: Financial advice is only for the rich
The research found three-in-four clients earning $120,000 or less per year who work with financial planners felt financially secure and confident which is higher than unadvised consumers on the same level of income.
MYTH: Financial planning is only needed at retirement
Nine-in-10 Millennials who work with a financial planner agree that financial planning has left them better off financially, according to the research.
MYTH: Financial planning costs more than it’s worth
The research found eight-in-10 clients of financial planners say the benefits of financial planning outweigh the costs.
MYTH: Financial planners lack objectivity
Over nine-in-10 clients of financial planners report they trust their financial planner to act in the client’s best interests, the research revealed.
“Advice professionals and their clients have always known that these long-standing myths that have been regarded as public truths are false,” says FAAA Chair David Sharpe CFP®.
“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 (advised) and those who do not (unadvised). 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,” says Mr Sharpe.
