Abstract
Individuals need to seek professional financial advice to achieve their financial goals. However, some do not see the value of consulting financial planners, and show little intention to use financial planners. Furthermore, there is a lack of research explaining why these individuals do not make use of financial planners. This study aims, therefore, to investigate the factors that could possibly influence individuals’ intentions to make use of a financial planner: awareness, perceived image, trust, and perceived rewards. To achieve this, a hypothesised model and hypotheses were developed and empirically tested. The results of the study indicated that there are significant relationships between perceived image and rewards, on the one hand, and intentions to use a financial planner, on the other. Thus financial planners must portray a positive image and deliver the perceived benefits of engaging in financial planning if individuals are to recognise the value in making use of their services.
Highlights
The need for personal financial planning has increased due to demographic and economic trends in the financial planning industry, increased life expectancy, and the rising costs of health care in South Africa (Murtuza & Brunsen, 1988:54)
On the question of which financial planning services individuals would most likely seek assistance with, it was found that retirement planning, investment management, and estate planning were the services most in demand
Financial planners must ensure that they include these services in their service offerings, and tailor their financial planning services in these aspects of financial planning to attract clients
Summary
The need for personal financial planning has increased due to demographic and economic trends in the financial planning industry, increased life expectancy, and the rising costs of health care in South Africa (Murtuza & Brunsen, 1988:54). As a result of increased awareness, individuals have become more sophisticated in their investment decision-making (Murtuza & Brunsen, 1988:54). Despite these significant changes, individuals still lack the necessary personal financial planning skills and knowledge to manage their personal finances adequately (Van Rooij, Lusardi & Alessie, 2011:593-594). Individuals make inappropriate financial decisions and purchase financial products that do not meet their needs (Gaskell & Ashton, 2008:160). Professional advice is necessary, given the nature of financial products and the complex needs of individuals (Murphy & Yetmar, 2010:814; Gaskell & Ashton, 2008:160). Individuals do not see the need for financial planning, and show little interest in seeking professional advice (Murphy & Yetmar, 2010:816)
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