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Kiwis shun professional advice: Report

New Zealanders are still reluctant to seek professional financial advice – and it may be because they’re worried about being told what to do, Chartered Accountants Australia and New Zealand (CA ANZ) says.

Sunday, March 8th 2020, 10:21AM

It has released new research that showed New Zealanders were more likely to turn to family and friends for advice than they were to go to a professional adviser.

Only 40% of people sought advice from a professional. Those who did were likely to be older, wealthier and female.

CA ANZ Thought Leadership and Research Leader, Geraldine Magarey said the report showed advisers must rise to meet both people’s changing financial needs and the environments in which they operated.

“Our survey has found people are not thinking or talking about their finances as often as many might expect,” Magarey said.

“The most trusted source of information comes from family and friends around a barbecue, or dinner table, followed by accountants.

“And while family and friends are considered a good source of advice, accountants are viewed as the most competent and trustworthy – above other professions, including bankers and lawyers,” Magarey said.

She said some people did not want to seek advice because they worried they would not be able to retain control of their situations. There was a sense that if they went to see someone they would have to give that up and be told what to do, she said.

“They should think about it like any other type of advice it’s giving help around making a decision … it’s something for the profession to think about.”

The report found that as people got older, the value they placed on professional financial advice increased.

“This is unsurprising – as we get older, and more risk averse, we want to know [we’ll] have enough money to retire comfortably,” Magarey said.

The report showed people on lower incomes tended to think their situation was not complicated enough to warrant financial advice.

“This is an interesting comparison – lower-income earners view financial advice in the prism of solving their problems while higher-income earners look to advice to proactively look for opportunities to grow investment or to understand an issue,” Magarey said.

“It’s up to the industry to change that misconception and ensure expertise can be used to help people improve their financial situations.”

Another key report finding was the fact that more women were seeking advice as they became more involved in household financial decision making and on average lived longer than men.

“There is no doubt technology will play a major role in the way advice is delivered, but the Future of Advice report finds that we aren’t ready to move away from face-to-face contact with our advisers just yet.

“In fact, the survey found only 12% of people have heard of roboadvice, and a significant percentage are not comfortable with the idea of receiving financial advice from a computer,” Magarey said.

She said roboadvice would ultimately help keep costs down. 

Many people did not want to get all their advice from technology, she said, but how the technology helped advisers would be important.

Magarey said it would make sense for accountants to become more involved in offering advice on private wealth issues because they often had a broad view of a person’s financial life and circumstances.

Tags: accountants financial advisers

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Last updated: 13 July 2020 7:38am

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