Revealed: Five Consumer Insights Every Adviser Should Know

While advisers are well-versed in their own clients’ concerns and interests, taking the temperature of everyday Australians can be a good way to work out how to position the business for new clients.

ARdata surveyed more than 2,000 consumers this year about their financial interests, where they want their money managed, and areas where they need more information. Based on what they said, here are five key trends worth watching.

1. Ignore social media at your own risk

Social media has been around for a long time, but its role as an aggregator for financial content is growing by the day. Increasingly, it’s where consumers are turning for information about how to manage their money. In fact, our research shows 5 per cent of consumers rely exclusively on insights gleaned from social media.

While not every adviser will wish to be a ‘finfluencer’, ignoring the presence and influence of these platforms could be a risky strategy. We expect to see more advisers jump on social media to capture prospective clients or share the value of financial advice.

2. Cryptocurrency is here to stay – and consumers want to know more

Consumers are intrigued by cryptocurrency, with one-in-five determined to learn more about the emergent asset class. The appetite to invest will continue to increase, whether or not advisers are involved. Many advisers are recognising that, but top licensees haven’t added the asset class to approved product lists, due to concerns about regulation, consumer protection and insurance. ARdata has been told work is being done on the regulatory front, so we’ll be watching this space closely.

3. The set-and-forget message appears to be working

When it comes to marketing the value of advice, attention is often placed on advisers’ expertise in money management and strategy. However, advised clients may have an edge in other areas, too – such as the ability to sleep more soundly through market volatility. Indeed, our research shows advised consumers are less concerned about the impact of short-term market fluctuations. Results from our survey in January showed two-in-five unadvised Australians said they felt either ‘not at all confident’ in financial markets or ‘slightly less confident’ than they did a year earlier, compared with one-third of advised clients.   

4. Advised clients say they know more about money

Recipients of financial advice also report greater financial knowledge. Two-fifths of advised clients from our survey self-rated their financial literacy as “above average”, compared with less than a third of unadvised clients. It’s worth noting there are other factors that could help explain this, such as advised clients having higher salaries and capacity to invest in financial education.

Figure 1 - Consumers' self-rating of financial literacy: advised vs unadvised

Source: ARdata

5. Debt is a key concern

Debt and inflation will be on the minds of many Australians this year, which may mean more clients turning to their advisers for help navigating the former, in particular. Australia’s ratio of housing debt to household income hit a record 140 per cent in September 2021 (RBA), as house prices continued to skyrocket. There is also talk of a rate rise as inflation persists. Unsurprisingly then, more than a third of consumers would use a spare $10,000 to pay down debt, while more than a quarter would save it for a rainy day.

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