Most Australians can't pay upfront fee for insurance advise: study

Regulatory disruptions have also reduced access to life insurance.

Most ordinary Australians cannot afford to pay an upfront fee for financial advice, possibly leading to a lack of access to financial advisers should the trend continue, according to a whitepaper published by the Choice & Access to Life Insurance (CALI).

Already-underinsured middle to low income earners are increasingly unable to access much-needed financial advice during key life moments like buying a home, starting a family, or transitioning to retirement.

Regulatory disruptions have resulted in access to life insurance through banks, direct from insurers, through superannuation funds and financial advisers becoming more limited. Underinsurance levels will continue to increase across communities if the government and regulators fail to act, CALI said.

One in five Australians aged 25 to 35 are currently considered underinsured, with 20% of their middle-aged peers having less life insurance than the community standard, the report said.

Moreover, the dwindling number of financial advisers are progressively zeroing in on fewer but higher value customers, fearing that this could result in only the wealthiest 15% of Australians having access to life insurance with personal advice.