Advised clients more satisfied despite heightened costs: Report

A new report highlighting the value of financial advisers indicates clients are even more satisfied despite a higher cost of seeking advice.

According to Russell Investments' annual Value of an Adviser Report, which surveyed almost 1000 Australians, the value of advisers continued to grow when it comes to improving outcomes for its clients.

Specifically, 83% are 'very' or 'extremely' confident about achieving their financial goals after receiving advice, compared with 41% before advice. This also came at a time where advice fees have risen from $4572 to $5235, but 90% rated their adviser as 'good' or 'excellent' value, up from 84% in the year before.

The value of advice is also represented by the surge in client satisfaction, with 33% rating their adviser a full mark (10/10), despite the heightened cost of seeking advice.

Honeycomb Strategy head of client service Jason Morris said this is the "perfect encapsulation" of what consumers are thinking about when it comes to financial advice.

"Clients are paying more for advice compared to last year. However, that hasn't cased a downturn in satisfaction," Morris said.

"People are happier than ever with advisers, and to complement that uplift, the strongest for the growth came from Baby Boomers and the second highest uplift was amongst Gen Z.

"What's quite encouraging is that satisfaction is growing, but it's also not isolated just to one pocket of the market... It's also working for the new generation."

Similar to last year's findings, trust remains the most important attribute for a client seeking advice.

Russell Investments head of distribution Australia and New Zealand Neil Rogan said trust will underpin the consideration of a client's surroundings including their family, lifestyle, and financial future to be able to make appropriate decisions at appropriate points in time.

"Having a trusted relationship becomes critical now to the whole advice equation," he said.

"The firms best positioned for the future will combine exceptional human advice with scalable delivery models, giving advisers more time to build trust, apply judgement and help clients answer the question: 'Am I going to be okay?'"

Morris echoed Rogan's statement, saying trust is increasingly becoming a key factor.

"[Trust] is an all-encompassing factor that accounts for the quality of interactions and the frequency of those interactions," Morris added.

Meanwhile, advisers continue to struggle to deliver personalised advice at scale, as 62% of advisers face challenges to do so.

The rapid growth of artificial intelligence (AI) has helped implemented better efficiency for advisers, but it also presented as a potential obstacle as clients are increasingly using AI for advice.

However, the report found the increasing utilisation of AI is not reducing advice demand as 26% of non-advised investors say AI is more likely to make them seek professional advice.

Morris said the personalisation through human interaction still edges over AI.

"You can find advice online, and you can customise your query in ChatGPT or Claude to be about your own circumstance, depending on your level of openness, providing personal information. But it's not going to be as personalised as you could get from an adviser, where that trust element will come in," Morris said.

"[Advisers] are not just running numbers; they're making an informed judgment and applying a discerning lens to one situation.

"I think that's the thing AI will never be able to perfectly replace. There can be some signals to be a bit more personalised, but again, that is something that only a human-to-human interaction can create."

He reiterated the importance for advisers to be selective with the tools available to deliver personalisation at scale.