Utilising a sample of over 55,000 retirement portfolio rebalances, we examine (i) who seeks financial advice prior to rebalancing, and (ii) compare portfolio outcomes between advised and self-directed rebalances. We find that wealthier, older, and female members are more likely to receive financial advice prior to rebalancing, and that advice is positively related to several portfolio outcomes. We also find no evidence that financial advisers recommend higher fee funds.

We examine individual retirement portfolio rebalances towards ESG funds during the pandemic period and the ensuing market crash. Our sample comprises over 22,000 portfolio rebalances performed by individual members of a large Australian defined contribution pension fund. The results show that demand for ESG funds among pension fund members declined substantially during the market crash. Younger and female members are more likely to rebalance towards ESG funds during the sample period, but these relationships are moderated by the market crash. We also show that members rebalance smaller amounts towards ESG funds during the market crash. Overall, the market crash had a pronounced effect on the sustainability preferences of pension fund members.

Abstract Cultural competence has been cited as a key contributor to the pursuit of ethical and professional standards in a variety of professions (Tully 2020; Osborn & Karandikar 2023). There has, however, been little attention in the literature on the implications of cultural competence concerning the provision of financial advice. The discussion about the operationalisation of culturally aware approaches and behaviours in professional advice settings may be advanced by using practice-based knowledge. This qualitative study is a first attempt to assemble the experiences and insights of financial advice professionals across Australia to identify key aspects of adapting to the cultural diversity of Australian society. The experiences and views of 21 Australian financial advisers from various backgrounds using a combination of narrative and thematic analytic methodologies was applied. Four distinct themes were identified within the separate domains of 1) lack of visible diversity, 2) concerns of bias and labels, 3) perceived limitations and challenges in cultural competence, and 4) pathways to acquiring cultural competence. We conclude that the profession needs to do more to lift the cultural confidence and competence of financial advice practitioners.

Efforts to increase the low global consumer uptake and recognition of financial advice as a trusted profession have been hampered by low financial capability, distrust of financial advisors, and soaring costs. While considerable research has been published on the value of financial advice, a synthesis of scholarship is surprisingly absent, leading to a lack of credible information on the outcomes of professional financial advice. To determine the ways in which value has been contextualized and measured and the extent to which value has been substantiated, this themes-based narrative review comprehensively examines tangible outcomes, such as investment performance, and less tangible components of value relating to consumer wellbeing and the client-advisor relationship. We conclude by proposing a conceptual framework of the value of financial advice to support the development of a more consistent, rigorous and coherent body of literature across jurisdictions, with increased transparency for consumers and other stakeholders of financial advice.

Abstract This article reports research into an area of insurance, personal insurance. This is important as some research suggests that insurance literacy could be related to the level of insurance purchased. To consider this potential relationship this article reports a detailed analysis of interviews with consumers and financial advisers in Australia about their consideration of personal insurance products. The findings reveal financial advisers consider that consumers have very low levels of insurance literacy, which they believe is linked to underinsurance. Consumers demonstrated low levels of personal insurance literacy, with trauma insurance being the least understood, and this may lead to strategies to improve insurance literacy and address concerns about under- or over-insurance.

Indigenous peoples continue to be underrepresented in small businesses in Australia. The aim of this paper was to explore the financial practices impacting the sustainability of Indigenous small business owners. We sought to find out how Indigenous Australian small business owners sustain their small businesses by exploring the associated financial practices. To achieve this, we conducted 45 interviews with Indigenous small business owners and stakeholders. We analysed the interviews to identify themes and then grouped the themes into three categories: (1) personal, relational and institutional considerations; (2) operational (internal and external) challenges; and (3) development challenges (that hinder business operations). We found unreasonable, unsustainable and/or unjust financial practices across the personal, relational and institutional considerations that Indigenous Australian small business owners face. Based on these findings, we recommend changes to provide government-funded opportunities for Indigenous graduates to offer business training. We also advocate for increased access to funding for Indigenous small businesses and analysis of loan frameworks nationally to identify ways to transform financial practices associated with lending. Our recommendations, if adopted, could help to further strengthen support initiatives that benefit Indigenous Australians.

Financial and commercial literacy are essential skills for small business owners to navigate an increasingly complex financial landscape. This study examines the financial and commercial literacy of 592 Indigenous and non-Indigenous small business owners. We found that small business owners had low levels of financial and commercial literacy with significant differences for Indigenous small business owners located in remote areas and for non-Indigenous small business owners who are female, young, and who have lower levels of education. We demonstrate the need for more support to improve financial literacy among small business owners to enhance the long-term sustainability of their enterprises.

International students studying a Master of Professional Accountancy (MPA), or equivalent postgraduate degree in accounting, in Australia were designed to fill the skills shortage gap for accountants, but employability rates appear low at 25% compared to 75% for domestic graduates. University work integrated learning (WIL) programs have been implemented to provide opportunities to increase employability, yet participation rates for international students appear low. This study uses an exploratory, qualitative approach, with semi-structured interviews of industry and students, to explore the participation rates, experiences and expectations of stakeholders in relation to WIL. Implications of the findings for stakeholders include preparation programs and simulated WIL opportunities.

In Australia, there are agencies funded by the government to provide support to Indigenous peoples wishing to start a business and to provide ongoing support for their businesses. In this chapter, we highlight the government-funded agencies mentioned by Indigenous small business owners and provide insights into their experiences. Informing this chapter are 36 interviews with 30 Indigenous small business owners and 6 Indigenous business stakeholders from urban, rural, and remote areas of Australia. We explore the practice of support from an axio-onto-epistemological perspective. We use the theory of practice architectures lens to analyse the data, identifying how the practice of support is enabling and constraining Indigenous small business owners. Next, we share how these government-funded agencies are understood to be used according to Indigenous stakeholders. Last, we recommend improvements that may further support and sustain Indigenous small businesses.

Financial advice is perceived to be inaccessible and complicated with consumers at the mercy of a sector under sustained scrutiny, raising questions about value for clients. This study systematically reviews the literature on the value of financial advice. Extant research focuses on financial benefits and lacks a holistic view of value and the factors impacting it. Gaps exist across non-financial benefits, geographic regions and over time. We call for a sustained and coordinated approach to research in this field. The findings inform consumer engagement strategies, policies concerning the uptake of professional financial advice and development of the profession.

In A Move in the Right Direction: Client Relationships in Financial Advice, from the Summer 2022 issue of The Journal of Wealth Management, authors Katherine Hunt, Mark Brimble, and Brett Freudenberg of Griffith Business School conclude that Australian financial advisors must continue to forge deeper connections with their clients and address areas of concern on both an industrywide and a personal basis. The authors explore the determinants of relationship quality between Australian financial advisors and their clients. They utilize 2016 surveys of financial planners and consumers to assess perceptions of the advisor–advisee relationship, such as perceptions of trust and engagement, and chart how overall relationship quality is impacted by six factors: trust, engagement, commitment, client activity, ownership, and empowerment. They compare the results with data from their identical 2009 study to demonstrate a general increase in relationship quality, driven primarily by growth in engagement, trust, and commitment. Additionally, they divide survey results for both clients and advisors by demographic characteristics, including gender, age, education, and income, to provide control variables and assess the degree to which measures of quality vary by subpopulation. Overall, shifts in client and advisor perceptions between 2009 and 2016 can be attributed to many factors, including continuing industry regulation, increased professionalism among advisors, demographic shifts in clientele, the introduction of robo-advice, and deeper communication between clients and advisors.

This article examines the switches in defined contribution plan investment options made by investors in the lead-up to and during the COVID-19 pandemic. We use switch timing, short-term outcomes, and investor characteristics to determine who is more and less likely to make investment decisions with seemingly “better” or “worse” outcomes. Utilizing a sample of more than 40,000 changes in asset allocations (switching decisions), we investigate the volume and timing of switch outcomes to assess the efficacy of financial decision-making during the pandemic. We find that both the risk of “worse” switches and the volume of transactions increased, along with a greater proportion of negative outcomes. Investors’ age and gender were influencing factors, with older and female investors experiencing significantly poorer switch outcomes. Additionally, perceived urgency in relation to decision-making during the crisis, combined with particular investor characteristics, may have worsened investor outcomes. We call on fund trustees and policymakers to consider strategies to support investors in making more effective switch decisions.

There is a growing personal responsibility for individuals to ensure their financial security, which can include the ability to cope with the uncertainty that can arise. Insurance can play an important role in allowing people to manage this uncertainty, including personal insurance such as life insurance, total and permanent disability, income protection, and trauma cover. Our understanding of personal insurance is particularly limited. This article reports a study into Australians’ confidence as it relates to personal insurance, and whether they consider their coverage is adequate. This understanding is important as confidence could influence the decision to purchase insurance.

The Australian financial advice industry continues to be the subject of ongoing regulatory reform largely driven by persistent failures of advice and products. Despite these concerns, many Australian consumers continue to have productive, effective, and high-quality relationships with their financial adviser. This article seeks to understand the determinants of quality in these relationships both contemporaneously and how this has changed over time. Deploying a research instrument used in a study in 2009, we compare and contrast the views of practitioners and clients both with updated data and over time. We find once again that systematic differences in the perceptions of professional-client relationship quality exist. We find that these perceptions have changed over time, with high-wealth clients’ perceptions differing from those of other clients, just as the perceptions of more highly educated financial advisers differ from those of advisers with less education. Overall, relationship quality has increased over a number of dimensions.

ABSTRACT The COVID-19 crisis presents an opportunity for the financial advice sector to demonstrate its importance. This paper examines literature from multiple disciplines to better understand the nature of a crisis, the role that expert advisers play and the value of advice to clients during a crisis. The literature demonstrates the multidimensional nature of a crisis, the need for a sophisticated approach to client-professional relationships and the positive impact of professional financial advice on wellbeing during and beyond a crisis. The findings motivate further research to establish a more detailed framework for understanding the value of financial advice.