Insurance brokers and financial advisers are only trusted by a minority of consumers, according to a new survey by research house Datamonitor.

The survey found only 18.5% of those surveyed trusted brokers and 20.4% sought advice from financial advisers.

The majority of consumers (77%) relied on their own advice while 35.4% sought financial advice from family and friends.

But National Insurance Brokers Association (NIBA) CEO Noel Pettersen disagrees with the survey, arguing other research shows brokers are trusted advisers.

“Other surveys confirm those who use brokers continue to use them as the trusted third party in the insurance transaction,” he told insuranceNEWS.com.au.

“Banks are traditionally involved in domestic insurance products, [while] brokers reign supreme in commercial placements, with more than 90% placed through NIBA members.”

However, Association of Financial Advisers CEO Richard Klipin says the Datamonitor figures are in line with what his organisation has found from its surveys.

“The number of people seeking financial advice is always far too low, and those who don’t get help are always happy to come up with a load of negatives,” he told insuranceNEWS.com.au.

“There is a communications gap between those talking with advisers and those who don’t, which seems to hover about the 75% mark.”

Datamonitor Senior Analyst Andrew Haslip says the rise of social media and ease of modern communications means consumers find it easy to ask their family or friends for advice.

“Few consumers are ever cut off from their social networks,” he said. “In a majority of mature markets, such as Australia and Japan, the opinion and advice of friends and family rank ahead of all financial services institutions.”

The survey says consumers still trust financial advice from any of the major banks operating in Australia.

Mr Haslip says 40.4% of consumers said they completely or greatly trust their national bank for financial advice. 

“This situation reflects the stable and well-established position of the large domestic banks, and this is particularly important for the insurance market,” he said. “Many of the big banks are also active in the home and car insurance markets.” 

Mr Klipin says the problem persuading the public to use intermediaries is beyond the financial advice industry acting on its own.

“The Federal Government has an obligation to promote the financial services industry through financial literacy programs rather than play to the 75%,” he said.