The advice gap: why not having a financial advisor costs more than you think

Too many Australians see financial advice as a luxury for the wealthy. This perception isn't just wrong, it's financially dangerous.

Going without professional financial guidance often costs far more than the advice itself. The hidden costs of financial missteps and missed opportunities can add up to hundreds of thousands of dollars over a lifetime.

Why? 

1. Opportunities get missed

Every financial decision creates a ripple effect that compounds over decades. Without professional guidance, most people miss crucial wealth-building opportunities.

Tax inefficiencies alone cost thousands annually. The average Australian pays more tax than necessary because they don't understand salary packaging, superannuation strategies, or available deductions. A financial advisor often identifies tax savings that exceed their annual fee in the first consultation.

Poor investment choices erode returns over time. Many Australians stick savings in low-yield accounts or choose inappropriate products. The difference between a 4% return and 7% return over 20 years on $100,000? It's $168,000.

Ineffective debt management compounds the problem. Without guidance, people prioritise the wrong debts, miss refinancing opportunities, or fail to leverage good debt effectively. Strategic debt management can save thousands in interest while accelerating wealth building.

2. Uncertainty becomes expensive 

Financial stress doesn't just affect your peace of mind—it affects your wallet.

Panic selling during downturns destroys wealth. Without professional support, many investors sell at the worst times. The average investor significantly underperforms market returns largely due to poor timing driven by fear.

Analysis paralysis leads to missed opportunities. Overwhelmed by options, many people simply do nothing. They miss rate opportunities, delay investments, or fail to optimise super. Inaction is rarely the best financial strategy.

3. Guessing creates risk  

Perhaps most concerning is how the advice gap leaves Australians vulnerable to financial predators.

Bad products target the unadvised. Without guidance, people fall for high-fee investments, inappropriate insurance, or unsuitable loans that appear attractive but devastate returns.

Scams prey on uncertainty. Lacking trusted advice, people become targets for get-rich-quick schemes and fraudulent investments. Australians lose hundreds of millions annually to financial scams.

The cost of one major financial mistake can exceed decades of advisory fees.

So why are people going without good advice? 

The irony is that most Australians understand the value of financial advice—they just can't access it.

The advisor shortage has created a supply crisis. With only 16,000 licensed advisors left in Australia (down from 28,000 just six years ago), qualified professionals are stretched thin. 

The cost barrier keeps advice exclusive. With median initial fees of nearly $4,000 and rising compliance costs, traditional advice models price out the very people who would benefit most from guidance. 

Geographic barriers compound the problem. Regional Australians face even greater challenges, with some areas served by just a handful of advisors responsible for hundreds of clients.

FAYBL creates a more accessible financial future

But what if quality financial guidance could reach beyond the traditional high-net-worth client base? What if technology could help advisors serve more people efficiently while maintaining the personal touch that builds trust?

It's a massive challenge … and that's why we created our solution to make quality financial guidance accessible to more Australians.

FAYBL lets wealth management firms scale their support safely to deliver faster, tailored financial advice, so advisors can focus on what they do best—build relationships, think strategically, communicate context and be the trusted guide for their clients. 

We do this through human-led, AI-augmented workflows that increase efficiency, speed up the client interactions and reduce error rates and non-compliance. 

Using FAYBL, firms can slash the financial and resourcing burden of onboarding and administration, and see more people, earlier, providing safer professional advice, at scale. 

Find out more at faybl.com