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Financial Planning
How advice can conquer stigma

Hostplus' head of advice and financial planning believes providing modules of the comprehensive financial advice model might help to reduce stigmas which stop people from getting help with their finances.

Appearing as part of an online panel discussing how to solve the unmet advice gap for the Australian Institute of Superannuation Trustees Conference of Major Super Funds, Hostplus head of advice and financial planning Maurizio Lombardi pointed out many super fund members still don't access advice because it makes them feel incapable of organising their own finances.

"People are still not comfortable talking about their finances," Lombardi told the panel.

"And I think that is a big barrier to people seeking advice. People see it in some ways as a defeat that they need help.

"I think there has to be a way that perhaps by saying 'You're not defeated by working out a way that we can better utilise your money so you can achieve your goals', I think that would go a long way to getting people more interested in seeking advice."

Lombardi said financial advice posed an interring dynamic, in that people seeking professional advice in other areas of their life don't see it as a defeat. But when they seek financial advice, they do.

"I can't think of anything at the moment where people have to go seek professional advice in other formats and see that as a defeat. As 'me being not capable of doing it myself,'" he said.

"Whereas with finance, there's still an element of that."

In order to remove that barrier, Lombardi believes consideration should be given to how advice can be modularised so that super fund members in particular can access parts of the advice experience while not facing "the deep end" of the comprehensive experience, which lays bare the entire reality of a members financial situation.

"I think if we can simplify and de-stigmatise that, and there's going to be element of having to change the process because going through a full comprehensive advice process doesn't make it easy to de-stigmatise that because you are going to be thrown in the deep end," he said.

"Maybe modularising these areas would be a start in the right direction.

"Members want help and in essence that might be something as simple as budgeting or what social services are available. They don't come to these appointments saying 'Okay well look at my entire situation and help me solve for all of it'".

Lombardi said there is "definitely an element" of super fund members that want comprehensive advice, but to solve the unmet advice gap, there has to be some thought around how to modularise advice.

"Modularise them in a way to say 'Okay let's just focus on your cash flow', or 'Let's just focus on your insurance needs,'" Lombardi said.

Current regulation stands in the way of implementing this kind of solution, he said, but while it isn't impossible, doing so would blur the lines between advice, and education and literacy.

Read more: Financial adviceFinancial planningHostplusModulariseAustralian Institute of Superannuation Trustees Conference of Major Super FundsMaurizio Lombardi
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