Ego and Distrust

More than nine out of ten high net worth (HNW) individuals who have never engaged a professional financial planner cite adviser self-serving behaviour as a reason behind not seeking advice.

A new HNW study by CoreData reveals one in four (26.1%) HNWs have never utilised the services of a qualified financial planner.

For this quarter of HNWs, 92.7% believe to varying degrees that planners “just try to sell products to benefit themselves”.

35.4% of those who have never engaged with a planner ‘completely agree’ that planners are self serving – this equates to approximately 1 in 12 of all Australian HNWs.

The two other primary obstacles for the advice industry in attracting HNW non-advice users are the belief among this subset that they can do a better job than an adviser and that they can’t trust an adviser with their lifesavings.

Almost four out of five (79.3%) HNW non-advice users believe to some extent that they can do a better job than a planner – 28.0% completely agreed they could do a better job.

Meanwhile 73.2% of those who have never used an adviser cited lack of trust, with 25.6% fully agreeing that they can’t trust an adviser with their lifesavings.

The study revealed that 36.9% of all HNWs are currently engaged with a financial planner, 10.5% used to have a planner but no longer, while 26.4% of HNWs use a planner sporadically but do not claim to have a dedicated adviser whom they interact with.

The research, which incorporates both qualitative and quantitative data collection, was undertaken in late June and early July and involved 628 Australian HNWs.

HNWs were defined as individuals with in excess of $750,000 in net investable assets (excluding their primary residence).