Finding the right person to get financial advice from can be tricky and many people are just relying on family members for monetary guidance.
There’s no denying many Australians have been left dudded by supposed “experts” who have given them shoddy advice and left them worse off.
Banking giant National Australia Bank recently revealed it would set aside $1.2 billion to compensate victims including those who received dodgy advice from planners linked to the bank.
And rival bank ANZ set aside $559 million for customer-related remediation, including poor advice.
The big banks were hauled over the coals in the financial services’ royal commission for disgraceful acts such as charging fees for no service, billing dead people and mischarging customers.
But new research by financial comparison website Finder quizzed 1000 Australians and found when it comes to seeking advice:
• 42 per cent receive financial advice from parents, grandparents and relatives.
• 26 per cent do an online search.
• 24 per cent use financial comparison websites.
Financial advisers in Australia must be licensed by the Australian Securities and Investments Commission or be an authorised representative of an Australian Financial Services Licensee. Before using an adviser, people should check the ASIC register to ensure the person is registered.
The Financial Planning Association of Australia’s chief executive officer, Dante De Gori, admitted planners’ reputations had taken a hit.
“You can find a planner by referrals or going on to the FPA website or using our dating app for consumers to find their perfect match for financial planning. It’s called Match My Planner,” he said.
“It’s just certified financial planners that enables you to have a non-committal conversation and interaction with a human being that could potentially be your planner in a safe environment.”
But cost has remained a barrier for many people seeking professional financial advice. Mr De Gori said the average charge for a statement of advice – a document that sets out the advice given to a consumer by their licensed financial planner or adviser – was about $2500.
Finder.com.au’s spokeswoman, Bessie Hassan, said it was important when seeking financial advice – whether professionally or from family or friends – to ensure it was from someone trustworthy.
“However, keep in mind that both your personal financial situation as well as the current economic climate are likely vastly different to what they may have experienced, so proceed with caution,” she said.
A recent ASIC report into financial advice found the biggest barriers to getting advice were the cost (35 per cent), a person’s financial circumstances being too limited (29 per cent), self-managing finances (26 per cent) and not trusting financial advisers (19 per cent).