With the increased focus by the Australian Government recently on most areas relating to the managed funds and superannuation industry, through a proliferation of inquiries and reports, including; “The Ripoll Report”, “The Super System Review” — Cooper Inquiry, “Henry Tax Review,” and “The Future of Financial Advice” — Chris Bowen, it is timely to update the Roy Morgan Research “Superannuation and Wealth Management in Australia” report to understand how consumers are coping with all this change.

A great deal of publicity has been seen recently about the role of financial planners and particularly the issue of remuneration levels and method of payment (commissions versus fee for service, trailing commissions etc.) However, the latest: Roy Morgan Research “Superannuation & Wealth Management Report” shows the issues go well beyond payment methods — and include access to financial planning, and consumer awareness of the independence of advice of financial planners.

The role of professionals (i.e. financial planners and accountants) in advising people on major financial investment decisions is a critical one given the relatively low level of financial literacy, the complexity of superannuation and regular rule changes.

Another key insight is that more than a third of super switchers don’t get any advice. The issue of switching superannuation fund manager can be complex and have major long term consequences and yet only 63% of those switching get any advice at all. Often the advice people get is from friends/family, employer etc. and only 42% of those who got advice (i.e. around 24% overall) obtained it from a financial planner, advisor or accountant.

The other critical issues relating to planners looked at in this report revolve around the understanding by clients of who owns the planning network that they are dealing with (the “independence” issue) and how closely linked the end product selected is to the ownership of the planner.

One of the key findings from the report is that there is still confusion over independent status of financial planners.  This confusion is particularly apparent where the branding is different to that of the owner, such as Hillross which is owned by the AMP Group and yet 50% of its superannuation customers think that Hillross is independent. Other cases include Financial Wisdom (owned by the CBA) where 62% think it’s independent, Garvan (owned by NAB/MLC) with 58% thinking it is independent and Godfrey Pembroke (owned by NAB) with 58%.


Financial Planner Considered to be "Independent"


Source: Roy Morgan Research. January 2006 to December 2009, n = 18,045.

Norman Morris Industry Communications Director, Roy Morgan Research, says:

“There sill exists a great deal of confusion regarding financial advisors and their ‘independent’ status and with the prospect of more changes coming as a result of the numerous inquiries, there is likely to be more demand for advisors in order for people to understand the likely impact those changes will have on them.

“This report shows that professional advisors are really only reaching the top end of the market and yet it is the lower end that often is in need of advice due to lower levels of financial literacy and lack of general involvement.  The challenge therefore is how to provide financial advice to the lower value clients and make them aware that they could benefit from the advice.”

Click here to purchase the Roy Morgan Superannuation & Wealth Management in Australia Report.

This ground-breaking report reveals where Australia's household wealth really resides. It contains profiles of Wealth Management Customers & Quintiles; Channels used to purchase wealth management products, Satisfaction & Switching intentions by product category and brand, the role of financial planners and ranks the top superannuation fund managers.


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