Remember when coffee was instant?
Remember those cafe bars which boasted only 5 cents a cup?
Now Australian’s are paying at least $3.25 a cup.
Could you imagine convincing the cafe bar coffee addict of yesteryear they’ll be paying at least 65 times the price in years to come?
What’s changed?
Plenty.
Particularly regards what Australians now value in their cup of coffee.
Thanks to many factors, the price of financial advice today is like the price of that old cafe bar coffee. It’s next to nothing. It isn’t highly valued or sought by the majority of everyday Australians. A few years back ASIC reported only 18% of Australians sought advice. It’s gotten worse. Last year a Goldman Sachs Asset Management Retail Investors Survey suggested about 10% of their clients rely upon external advisers.
The distributors of today’s “instant advice” understandably might see future world of advice much like the people who ran Cafe Bar International saw the future of their product (the distributors of Cafe Bar and a division of Burns Philip). Based upon their market share and award-winning design award they had no reason to believe everyday Australians would ever pay 65 times more for their cup of coffee.
And of course they’d be wrong.
I play a role with many Australian financial advice firms on their pricing committees helping them price their advice.
Everyday I see more examples that challenge the current thinking usually spun by the incumbent ‘leaders’ in financial services that everyday Australians can’t afford quality financial advice. That’s just their opinion based upon the sales of their ‘instant coffee-style product advice’.
The trust breaking point…
The GFC was the trust breaking point for consumers of financial advice both in Australia and throughout the world.
Everyday Australians don’t trust the advice being delivered today. The numbers of people seeking advice isn’t growing anything like the financial uncertainties afflicting almost every sector of our community.
The real issue regarding affordability of financial advice is that today’s big suppliers of “financial advice” have not yet understood how to present the value of financial advice to everyday Australians.
Australians value advice and they will pay for it when they experience it.
Don’t confuse today’s advice with valuable advice, it’s just the instant coffee variety.
Long term, Australians will demand better.
Just watch them.
What do you reckon?
Photo courtesy of Cafe Bar
About Jim Stackpool
For nearly 30 years Jim has influenced, coached, and consulted to advisory firms across Australia. As founder of Certainty Advice Group, he leads a like-minded team of professional advisory firms seeking to create greater certainty for their clients. As an author, blogger, columnist, and keynote speaker, Jim is regularly called upon for his professional insights into the advice industry. His latest book Seeking Certainty is available now.