Clients want advice, don't want to pay for it

Customers are willing to pay just $57 for a personalised financial plan, a new survey shows.

Thursday, January 14th 2016, 6:00AM 6 Comments

by Susan Edmunds

Ana Marie Lockyer

The research by ANZ confirmed what many financial advisers already know: Most Kiwis do not want to pay for advice.

ANZ asked 750 customers for their views on financial advice. A third wanted their KiwiSaver provider to offer them ideas and information. Almost half wanted specific recommendations.

Only 12% wanted a personalised plan for their retirement savings.

ANZ Wealth general manager products and marketing Ana Marie Lockyer said the main trigger for people wanting a personal financial plan was turning 65, but this was often too late.

“Many people are uncertain of the best way to manage their KiwiSaver money once they reach retirement age so would benefit from some good financial advice.”

Lockyer said price was a major consideration. On average, customers were prepared to pay up to $57 for a personalised financial plan - but many people expected this advice to be free.

“Given it takes time to build a full picture of an individual’s personal circumstances, we need to find ways to get quality information and financial advice to customers, at a price they’re prepared to pay.”

Lockyer said 46% of customers indicated they would definitely use digital financial advice tools, particularly if they were free. Just 15% of people said they would definitely want a complete financial plan in the future – however, only 3% of people said they would want this if they were charged a fee.

“We’re all living longer and young people today may need their retirement savings to last for 30 years or more. Investing in quality financial advice might be the best investment you will ever make.”

But she said advisers should not be disheartened. “There are absolutely groups of New Zealanders who do want to pay for financial advice services and they are wider than just KiwiSaver investors.”

It comes as KPMG's Head of Financial Services, John Kensington, said the financial advice industry was the answer to the problem of financially illiterate New Zealand but would need to regain investor trust.

“If that trust is lost, it is very hard to re-build it," he was reported as saying. "It is most important financial advisers demonstrate integrity when providing advice to clients; being open and honest about fees and clearly showing the client they genuinely want to understand the client's risk profile and needs and match products to those needs."

He said advisers needed to understand their clients’ circumstances, their risk appetites and what products were appropriate. If they could, advisers would lead the way in developing New Zealand's investment culture, he said.

Tags: ANZ financial advisers KiwiSaver

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Comments from our readers

On 14 January 2016 at 4:31 pm LNF said:
To see just how good professional advice is, go back 15 years and analyse the predictions of the top investment people and top Economists and the Reserve Bank CEO's (or whatever they choose to call themselves) and see how accurate all of those people were
Then ask what people would pay for their advice and you will see why they don't see Financial Advisers advice as worth a lot
At $75.00 you can give them about 15 minutes of your time - Total
On 15 January 2016 at 11:52 am investing said:
Good independent advice from my advisor is worth every cent I spend. However advice from the employee of a bank on how to invest with their employer would have to be seen as very expensive no matter how much they paid me.
On 17 January 2016 at 6:03 am henry Filth said:
Many of us have no problems with paying for advice.

The problem is the quality of the advice.

A quick "risk management" questionnaire and then stuffed into one of four "off-the-shelf" categories.

About as personal as an algorithm-driven website robo-adviser.

Then the salesmen start. . .
On 17 January 2016 at 11:04 am traveller said:
LNF makes a good point. You only really need to go back to about 2006 ie before the GFC when people were piling in to Finance Companies, Contributory Mortgages etc. Research published in Good Returns some time ago suggested that some 70% of those people did so without advice, relying upon the material supplied by the issuer. But this tainted the whole advisory industry and it will be hard to recover credibility. No doubt the banks will be rubbing their hands.
On 18 January 2016 at 3:17 pm layth said:
I wouldn't mind paying 100 for an advance I can trust.
10 or more years ago before Kiwi Saver existed I had my money in an investment fund that I can logon on web site and see if it's positive or negative, now a days in kiwi saver I can't see how the funds are performing.
On 18 January 2016 at 4:40 pm Tash said:
No LNF does not make a good point, he/she makes an irrelevant point. No one can accurately predict the future. In another 10 years when you go back 25 years those predictions that look bad now may look good!
It is about understanding the probable outcomes over varying time periods, the risks and uncertainties involved that no one can offer guarantees about, and then estimating which course the client should take, remembering that doing nothing is usually fatal to financial prosperity.

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