The industry needs to tackle consumers’ ‘fear of advice’

The industry needs to tackle consumers’ ‘fear of advice’ in order to be successful at growing the number of Australians receiving financial advice, according to Baz Gardner.

Speaking to riskinfo ahead of the 2014 AdviserEdge conference, Mr Gardner said that most advice models are set up to cater to those consumers who have already identified the need for an adviser.

fear of adviceIf we’re serious about more Australians getting advice, then we need to rethink the way we talk to consumers and help them to overcome their ‘fear of advice’,” he said.

Mr Gardner believes that it is not just the raft of bad news stories, such as the recent Commonwealth Financial Planning scandal, that make consumers fearful of advice.

“As an industry, we’ve historically positioned ourselves as a service for the wealthy. There is a perception among consumers that financial advisers will only work with people who have hundreds of thousands of dollars to invest. For the average Australian mum and dad with two kids, that is just not a reality,” said Mr Gardner.

The other fear factor that prevents consumers from taking the first step towards seeking advice is the belief that they need to be in control of their financial situation.

“It’s a bit like how people tidy their house before the cleaner arrives,” Mr Gardner explained. “There is this feeling that you need to have your finances in order before you go and see a financial adviser. Consumers feel embarrassed that they perhaps lack the expertise to have done something about consolidating their super, or taking out a life insurance policy, themselves. It can even be something as simple as sticking to a budget – consumers worry that they will be judged before they’ve even walked through the door, so they avoid taking that first step.

“It is time that, in our society, having an adviser is considered a normal part of life.”