The Betashares Financial Opportunity Index has recently unearthed significant potential for financial advisory services in regional and rural parts of Australia. By surveying 52,000 households across the nation, the index assessed investment capacity and highlighted areas such as Dayboro in Queensland, Olinda in Victoria, South Boulder in Western Australia, and Taree in New South Wales as key locations with high spare cash flow. These findings are particularly compelling because the spare cash flow in these regions averages over $180,000 per household, suggesting strong potential for financial growth. This prospect has led industry experts to acknowledge the increasing opportunities in these rural and semi-rural areas.
To explore the burgeoning sector further, Money Management conducted interviews with three financial advisers working in various regional parts of Australia: Stephen Gulbrandson, Tammy Strong, and Wayne Terry. Their insights provide a glimpse into the growing demand and distinctive challenges that accompany financial advisory services in these areas, underscoring the contrast with urban centers. This emerging trend has stimulated discussions about whether regional areas might, indeed, represent the future of financial advisory services in the country.
High Demand and Limited Supply
Stephen Gulbrandson, a financial adviser and director of three regional Queensland branches of Morgans Financial, highlighted an interesting trend: the surge in demand is primarily driven by the limited number of advisers available in these regions. Unlike Brisbane, where advisers are plentiful and can meet the demand, regional offices have been busier than ever. This phenomenon indicates that regional areas might be surpassing urban centers in demand due to the relative scarcity of financial advisers. This scarcity is significant because the high demand versus low supply ratio points to a market ripe with opportunities for financial advisers willing to operate outside major cities.
Similarly, Tammy Strong, who founded Strong Planning in Ipswich, Queensland, stressed the novelty of financial planning services in her area. She noted that her firm is probably the first of its kind within a 30-kilometer radius, indicating a substantial need for localized financial advice. Strong aims to establish a strong presence and reputable service for financial planners in rural areas. Her commitment to this new venture underscores the untapped potential and demand for personalized financial advisory services in places where such provisions have traditionally been scarce.
Unique Client Demographics
Wayne Terry of Financial Edge Group in the Central Coast region of New South Wales pointed out that regional areas encompass distinct client demographics compared to urban populations. Retirees, often moving from bustling cities to quieter, more serene regional settings, typically have significant surplus funds from selling their urban homes. This shift creates opportunities for financial advisers to assist with large non-concessional and downsizer contributions, which are essential for building wealth efficiently. Such demographic trends offer unique opportunities for advisers to tailor their services to the needs of these clients.
A consistent theme among the interviewed advisers is the essential role of community ties and referrals. Strong emphasized that her client base grew chiefly through word-of-mouth within the tightly-knit community. Without engaging in advertising, she received numerous referrals simply through the recommendations of satisfied clients. Terry referred to this organic growth as the “bush telegraph,” where information spreads quickly by word of mouth in regional areas. This phenomenon can be highly beneficial for delivering quality service and building a strong reputation but also holds risks if negative experiences are shared within the community.
Personal Relationships and Local Understanding
The advisers collectively underlined the importance of personal relationships in providing financial advice in regional areas. Clients in these regions tend to place great value on the personal touch and local understanding that advisers from the same area can offer. Strong noted that her clients especially appreciated her local background and direct interactions, such as being able to call her directly or even having meetings at her home. This personable and accessible approach presents a notable advantage in serving regional clients compared to the more impersonal services often found in capital cities.
However, transitioning from urban to regional areas can present challenges for city-based advisers. Gulbrandson warned against the assumption that urban experience will seamlessly translate to success in rural areas. He stressed the importance of integrating into the local culture and avoiding a condescending attitude toward the regional way of life. Terry also highlighted that clients in rural areas often have different needs that city advisers might not be familiar with, making it crucial to understand and fit into the local context. These insights reveal that successful transition requires not just operational adjustments but also cultural and relational awareness.
Optimism for the Future
The Betashares Financial Opportunity Index has identified substantial potential for financial advisory services in Australia’s regional and rural areas. A survey of 52,000 households across the nation revealed key areas like Dayboro in Queensland, Olinda in Victoria, South Boulder in Western Australia, and Taree in New South Wales as possessing high levels of spare cash flow. These regions have an average spare cash flow exceeding $180,000 per household, indicating significant financial growth potential. This insight has led industry experts to recognize the growing opportunities in these less urbanized areas.
To delve deeper into this emerging sector, Money Management interviewed three financial advisers: Stephen Gulbrandson, Tammy Strong, and Wayne Terry, who work in various regional parts of Australia. Their perspectives illuminate the increasing demand and unique challenges of providing financial advisory services outside urban centers. This shift has spurred debates on whether regional areas might be the future hub for financial advisory services in the nation. These insights could reshape how the industry approaches both regional and rural markets.
