Retirees shun advice due to cost

New research from Allianz Retire+ shows that 79 per cent of retirees did not seek financial advice during COVID-19, with only one in five retirees feeling they had easy access to professional financial advice and a third feeling that advisers ‘were for the rich’.

“We have to change perceptions of financial advice among retirees and increase access to affordable advice,” said Retire+ chief executive Matt Rady. “The advice proposition is proven to be an integral part of providing individuals with confidence and certainty in retirement.

“Sixty-eight per cent of those who were advised during COVID-19 said they are sticking to their financial plan. That means advice is definitely deterring people from making sub-optimal investment decisions based on fear or a lack of understanding.”

Around 70 per cent of retirees with money invested in a super fund did not feel well educated about managing their retirement income, while around three in five do not know where their superannuation was invested. Only a third understood the investment options available to them in retirement.

“The survey shows too many retirees are confused about superannuation, don’t know enough about how their retirement savings are invested, or how secure their money is,” said Mr Rady. “Seventy-three per cent did not agree that there were adequate options available to manage their retirement income.”

About 40 per cent of prospective retirees said they lost money during COVID-19, while 77 per cent of prospective retirees do not believe superannuation will provide them with enough money in retirement.

“Those nearing retirement have been particularly hurt by the downturn,” Mr Rady said. “These investors tend to have more funds allocated to shares, so have a higher susceptibility to market crashes. Typically, they are still working and need that income to build retirement savings.”