New research has revealed COVID-19 has altered Australian spending behaviour, with more households in a fragile financial position than ever before and facing reduced access to financial advice.
The research from CoreData, presented at the Financial Planning Association of Australia's (FPA) 'Uncovering the Value of Financial Planning Advice' virtual event held earlier this month, drew on key industry players and experts to discuss the increasing demand for quality and affordable financial advice.
According to the findings, four in five Australians took action to protect their personal finances from the impact of COVID-19, including reducing their discretionary spending (63.5%), reducing spending on essentials (47.8%), cancelling memberships (36.7%), seeking additional work (16.9%) and applying for financial support or a loan (12.8%).
FPA chair Marisa Broome said the results highlight the extraordinary and life changing circumstances we are living through.
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"It's affecting every facet of our lives. Our health, our work, our emotions, our friendships, our travel plans, our life plans and of course our financial circumstances," she said.
"Money plays such a critical role in our ability to live the life we want, especially in the face of challenging and unplanned circumstances."
The research from CoreData also found that those that acknowledged they needed to strengthen their financial position in the wake of COVID placed affordable advice and support from a financial planner of utmost importance, as well as tips and advice from companies on how to reduce bills (31.9%) and websites and free resources to explain what financial services and supports are available (27.2%).
Speaking during the event, Australian Government Financial Literacy Board chair Paul Clitheroe noted that current frameworks restrict advisers to only be able to offer their services to high net worth individuals or those who can afford advice.
"That satisfies [roughly] the top 10 or 20% of the population of Australia," he said.
"What do we do for the other millions of people who want to talk about everything from their credit cards, to investing a hundred dollars, to talking about [whether they should] put a thousand dollars in super or [towards paying off their] mortgage? That remains the challenge."
Broome agreed, confirming that financial advice is both expensive and often hard to access for most Australians.
"We want more Australians to seek financial advice but to do that they need to be able to access it and afford it," she said.
"I passionately believe that helping Australians to build their financial capability and understanding is critical not just to them individually but to the nation."
But CHOICE chief executive Alan Kirkland said it is vital that this advice be customer-centric to meet the needs of the Australian population.
"It's about really assessing when advice as provided by a financial planner is actually the right approach for a person and if it is, whether they need one-off advice or ongoing advice," he said.
"Because sometimes, good advice is about giving people the skills they need to make decisions themselves through their day to day life."