Page 24 - How Australia Retires

23 Vanguard | How Australia Retires

Insight 04

Financial information is abundant but

professional advice creates real value

In recent years, the
financial advice industry Almost 2 in 3
has faced severe working-age Australians
criticism and undergone have never engaged a
substantial structural financial adviser
change following the
Royal Commission
into Misconduct Financial advisers are not the leading professional sources of guidance,
in the Banking, source of professional guidance such as financial advisers or their
Superannuation, for working-age Australians, superannuation fund. Whether
these preferences are due to
and Financial particularly for those on the Low generational differences (for
Confidence Journey. Superannuation
Services Industry. funds are in fact the primary source, example, younger Australians
alongside banks, accountants and perhaps being more comfortable
government websites. with technology and non-
Consequently, these developments professional sources of financial
have resulted in a lack of trust Working-age Australians however information having grown up with
in the financial advice industry, are more likely than current retirees it) or otherwise, seeking financial
and it is therefore not surprising to consult a non-professional source, advice from a licenced professional
that working-age Australians preferring to do their own research can not only add financial and
6
would seek alternative sources or seek guidance from their partner emotional value , but can also
of guidance and advice. The or family and friends. This perhaps improve retirement readiness.
proliferation of social media and indicates a wariness of professional
online forums has also spawned a advice (whether that be due to a
wide range of channels, with some lack of trust or as a result of high
being useful hubs for information- fees) or simply because friends and
sharing but many offering family are more easily accessible.
unsubstantiated information
without the required regulatory Working-age Australians,
authorisations and oversight. particularly those on the Low
Confidence Journey, are also much
In addition, the cost of seeking more likely to seek information from
financial advice remains a barrier digital sources including podcasts,
for many Australians and is blogs, and social influencers. In
driving a growing advice gap contrast, retired Australians and
that may be detrimental to those on the High Confidence
their financial outcomes. Journey predominantly consult

6. Source: Vanguard, Putting a value on your value: Quantifying Vanguard Adviser’s Alpha (July 2022).