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.”
Mere puffery in numbers from Allianz, any idea of the sample size of respondents to the survey? We get it, financial advice is expensive and is contrary to the underlying need blah blah blah. How about some more support for IFAs looking to solve this need and more punishment for the ones that have put us all in this mess? Thanks ASIC
ASIC increase their fees by 30% yet expect advisers to offer advice in best interests of consumers, maybe they could if complaince costs were in the best interest of all parties as well
About 40 per cent of prospective retirees said they lost money during COVID-19 ….. so 60% gained or were break even …. suppose it depends on what they consider ‘lost”
We shouldn’t be trying to change the perception that advice is for the rich. Currently it is often only possible to add value over the fees charged for the wealthy. With 15,000 licensed reps left shortly there enough mass affluent to go around and still a very good living to be made. Those who aren’t in that category sadly we can’t help anymore which is tragic.
It is a worthy aim for all in the industry to advocate for more common sense regulation. Less duplication and less statutory and other bodies who regulate our advice and client relationships.
TPB, Austrack, licensee/professional organisation/AFCA/ASIC duplications and costs. Death by Fee disclosure lunacy. All need a serious reivew. How many terrorists or money launderers have been caught by the forest of paperwork that Austrack requires….? Can we have some statistics? How has TCP registration beneifted the consumer? The adviser? anyone? How many advisers know the differences between the TPB, FPA, FASEA codes of conduct?
Insurance advice licensing needs a review.
Get the adviser force highly educated, weed out the shonks (job is well progressed now) and then let us get on with advising…………
Don’t forget to add in that you after all this the emphasis will now also be on what level of client you have on the books. There is only so much time in a day and seeing new clients as well as keeping up with yearly reviews ( which no one should have a problem with in theory) will seriously impact lower value clients as the space just wont be there.
Wow- I’m flabbergasted! who would have expected this outcome? Surely increasing compliance costs and reducing adviser income would lead to more affordable advice?? How could our wonderfully clever politicians get it so wrong? Nincompoops!
Who would have thought
And they think it will get cheaper any time soon ?
Well 77% represents about the number of retires that end up on age pension with little else. Penny rich and pound poor as the saying goes. Perhaps if they had engaged with advice earlier in life things may well have been different.