Is financial advice going down the gurgler? Trust in advice plummets

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RaboDirect surveyed Australians and found that, despite all attempts to sway them, the public still doesn't really believe in financial advice or those who provide it. In fact, views have taken a turn for the worse, with some very surprising and concerning results from the RaboDirect Financial Health Barometer. 

In 2015, just 29 per cent of those surveyed said they trusted financial advice, which is down from 40 per cent in 2014. 

Key findings

  • Almost half of all Gen Yers surveyed had a long-term financial plan
  • Almost 40 per cent of Gen Xers and Baby Boomers had a long-term financial plan
  • In 2012, 17 per cent said that financial advice was only for the wealthy, and in 2015, 28 per cent believe this to be true
  • Those making voluntary superannuation contributions fell between 2013 and 2015 with Gen X reducing payments most often (a loss of nine per cent), Baby Boomers in next with a loss of three per cent
  • Gen Y makes the most voluntary superannuation contributions (32 per cent, up from 29 per cent in 2014)
  • The funds expectations in retirement dropped to almost half the recommended amount

So let's delve. 

Even after all the reviews, regulatory changes and apparent lifting of game, financial advice has not come out looking pretty. In fact, it appears to be more unattractive than ever, with trust eroding as time goes by. This doesn't mean people don't have financial plans - they do - but they may not include a financial adviser.

People and their financial plans

  1. In 2011, 35 per cent of Australians had a long-term financial plan. 
  2. In 2014, 46 per cent had a long-term financial plan (BB 51 per cent, Gen X 43 per cent, Gen Y 45 per cent)
  3. In 2015, 41 per cent had a long-term financial plan (BB 37 per cent, Gen X 38 per cent, Gen Y 48 per cent)

Gen Y and Baby Boomer ideas about who gets financial advice centres around one idea: only rich people get financial advice. 

  • 2012 - 17 per cent think advice is only for the wealthy
  • 2014 - 16 per cent of Baby Boomers, 26 per cent of Gen X, 27 per cent of Gen Y
  • 2015 - 28 per cent think advice is only for the wealthy, made up of 24 per cent of Baby Boomers, 25 per cent of Gen X , and 35 per cent of Gen Y

What happened between 2014 and 2015? 

The amount of people who distrust advice has largely stayed the same during the five-year study, however there has been a substantial shift between 2014 and 2015. 

In 2014, 40 per cent trusted financial advice, but in 2015, only 29 per cent of people do. This is a major shift in just a year. Gen Yers lost the most trust. 

In 2014...

  • Gen Y - 49 per cent agreed that they trust advice by planners or advisers
  • Gen X - 41 per cent trust advice
  • Baby Boomers - 31 per cent

Then in 2015...

  • Gen Y - 39 per cent trusted advice
  • Gen X - 26 per cent
  • Baby Boomers - 23 per cent

Read the full report