A new report reveals that of the Kiwis looking for financial advice, 34% want help with insurance.
According to The Future for Advice, a report prepared for Chartered Accountants Australia and New Zealand (CAANZ) by accounting firm Deloitte, trends in demography and wealth point to a large and growing demand for advice.
“The future looks positive for advisers,” says the report. Adding that older and wealthier people will seek out advisers – and more of them will be women.
“They will demand high levels of transparency, so they can be comfortable in the degree of control they have over their financial situation and be assured they are receiving value for money,” says the report. “They will be more financially literate, but perhaps not a lot more.”
They will be more financially literate, but perhaps not a lot more…
The report also draws on a consumer survey to establish the perception of value for money when it comes to insurance:
- 32% said they got good value for money
- 55% said they got some value for money
- 13% said they did not get value for money
According to Deloitte, convenience will be a key factor for those seeking advice but consumers will remain wary of new technology. That could put a question mark over how far consumer-facing artificial intelligent (AI) systems can be deployed.
“They [consumers] will want advice from people, preferably face-to-face,” says the report. “Greater consumer protections and increased professionalism of advisers will increase their demand for advice.
“However, the regulation that is helping parts of the advice industry rebuild their reputations through higher professional qualifications and skill levels will make advice more expensive and disjointed.”
Inflexibility with regulations may make it more difficult to receive continuity of advice over differing life stages…
The report says changes in regulations will provide better protection for some people but may make advice unaffordable and inaccessible for others.
“Inflexibility with regulations may make it more difficult to receive continuity of advice over differing life stages,” says the report’s authors. “Policy makers will need to work with industry and technology providers to resolve this tension.”
The report says that instead of considering AI and robo advisers – an automated computer-based service – as substitutes for human advisers, they are likely to be a key factor in limiting increases in the cost of advice while adapting to regulatory changes and changing consumer expectations.
“Developments in AI and robo advisers will allow advisers to automate workflows making them more consistent and efficient,” says the report. “However, consumers will still prefer that the practitioner is front and centre in delivering the advice.”
AI and robo advisers will allow advisers to automate workflows making them more consistent and efficient…
The report’s authors says that 80% of people surveyed say they feel more informed from using a financial adviser, 69% have greater peace of mind, and 68% feel more prepared for the future.
However, the report notes that the growing number of products, and their complexity, can make it difficult for consumers to identify and understand what advice is best for them at different stages of their lives.
“The failure of financial literacy to keep up is compounding this situation,” says the report.
Download the full report by clicking on the image below.
