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Australians without advice struggle in pandemic: Research

New research has revealed the true value of advice, as the mental and financial wellbeing of Australia's unadvised population suffers from the impacts of the COVID-19 crisis.

Fidelity International's latest Pulse Survey, which gauged the mental and financial wellbeing of 200 advised and 220 unadvised Australians during May, found that more than half (52.8%) of unadvised Australians worry about their money daily or weekly, while this drops to just over one in three (36.5%) for those with advisers.

Interesting, the overall wellbeing of advised Australians was also less likely to have been impacted by the COVID-19 crisis, as were their relationships, mental and physical health.

That's compared to almost half (48.8%) of those surveyed without advisers saying their mental health suffered as a result of the COVID-19 crisis. One in three (33.6%) of those currently advised said their mental health suffered as a result of the pandemic.

The impact of financial advice on Australian's long-term goals was also positive, with 72.1% saying they feel reasonably or very prepared for retirement. Meanwhile, 29.5% of those surveyed without advisers say they feel the same way.

Fidelity International Australia managing director Alva Devoy said the first half of the year will forever plague our memories; as both a devastating health crisis and its impact on the economy and people's finances.

"The pandemic has changed the way many of us live and work. For the more fortunate, this might provide opportunities to save or spend in a more considered way," she said.

"However, for many, it is causing significant worries from job security to the impact of market volatility on savings.

"While we cannot predict how this current crisis will develop, there are steps individuals can take to mitigate the impact on their own finances, reduce their worries and improve their overall wellbeing."

With many households tightening their belts in response to the recessionary environment, Fidelity International cross asset specialist Anthony Doyle argued the country was unlikely to experience a consumer led recovery.

"Given the outlook, it is important that savers understand the ramifications that the current low-interest rate world will have on the future prospects for their portfolios," he said.

"Cash, government bond and high-quality investment grade corporate bond returns are unlikely to compensate long-term investors for the rising costs of inflation. Unfortunately, we now face an environment where the concept of risk-free return is an historic concept."

Doyle said Australian investors will be required to take on more risk, for example, through higher yielding assets like Australian and global equities, to achieve their investment goals.

"We expect that in the current investing environment active investment management will become increasingly important to investors," Doyle said.

"Growth outcomes are likely to be volatile, meaning there will be clear winners and losers at a country, sector, and company level.

"The ability to generate alpha by identifying the long-term winners, and avoiding those companies that face a more challenging outlook, will be key."

Read our full COVID-19 news coverage and analysis here.

Read more: COVID-19Fidelity InternationalAnthony DoyleAlva Devoy
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