2021 is just here, and for many of us, it comes with a sense of renewal and perspective. It’s refreshing to be looking at things through a new lens, and with an eye on new opportunity.
“Out with the old, in with the new,” as the saying goes. And that to me doesn’t mean starting from scratch – just starting fresh.
Like any other sector, the financial advice profession has had a lot to learn and adapt to in the past few months. And as recent research proved again and again, not only were advisers there for their clients (virtually, if need be), but they also made a difference to Kiwis’ quality of life and peace of mind in a difficult time.
More than ever before, advised New Zealanders have experienced first-hand what it’s like to have an expert in their corner, answering their most pressing questions. But there are still barriers that keep people from accessing financial advice. So, how do we get more Kiwis on board? How can we break down those barriers?
My two cents: By identifying what these barriers are about, and consistently educating the public on the benefits advisers bring to the table.
Communicating the benefits
Our recent research shed some light on the actual benefits of advice, as well as the perceived barriers that keep Kiwis from working with an adviser.
On the one hand, research found that advised New Zealanders are comparatively better off, and feel better overall, than their unadvised peers in terms of financial, personal, and mental wellbeing – confirming the tangible and intangible benefits that quality advice delivers consumers.
On the other hand, surveys revealed that many Kiwis don’t get advice because they don’t recognise the positive effect it could have on their financial and personal health.
It’s a measure of the disconnect between the reality of advice and its perception amongst the general public. How can we address this gap? By communicating the benefits of advice clearly and, above all, in a meaningful way – one that people can relate to on a personal level. Not just cold numbers, but solutions to needs that span a continuum of time.
Perceived lack of wealth
One of the main advice barriers Kiwis often mention is their perceived lack of wealth. In many cases, people don’t seek financial advice due to their perception that they don’t have enough assets to protect, or wealth to invest.
To dispel this common misconception, it’s important that we keep conveying the message that advice isn’t just for the wealthy – it’s for anyone who has a financial goal in mind, be that protecting their family’s future, buying a home or saving for retirement.
In other words, advice is not just about the opportunities you already have, but those that you don’t know about, those that you can create. And I’ve seen it happen first-hand on my own financial advice journey; having a good conversation with an adviser can be an enlightening experience, one that opens up new horizons and unlocks hidden potential.
Perceived cost of advice
Another common barrier to talking with an adviser is the perceived affordability of advice.
A lot of work has gone into clarifying the mechanics of fees and commissions, but it’s important to remember that this matter can be quite confusing for the layperson.
I think that the key factor isn’t cost, but value and good client outcomes. With quality advice, the benefits outweigh the costs.
What clients look for in their adviser is someone they can trust, who understands their emotional needs and is committed to delivering on their goals. They need to know that, whether their adviser works on commission or for a fee, the service they provide is of the highest standard,delivers value and makes a difference to their lives now and into the future.
When it comes to commissions and fees, emphasising ‘value’ as opposed to ‘cost’ is key. And of course, transparency is crucial. By being upfront about how they get paid and any potential conflicts that may exist, advisers can build the trust that’s the foundation for any effective client relationship.
Our priority at Financial Advice NZ
Breaking down the advice barriers is something that Financial Advice NZ has been focusing on since its launch. We’re committed to supporting advisers, advocating for the financial services sector, and helping New Zealanders understand the value of advice.
Of course, cultural change isn’t linear but rather an ongoing process – and to us, it’s worth every effort. Visit financialadvice.nz to learn more about our initiatives and adviser resources.