Future of advice for retirement ‘incredibly bright’

Speaking at its annual adviser roadshow this week, Vanguard head of distribution Matthew Lumsden paid tribute to the resilience of advisers who have faced increased regulation throughout the COVID-19 pandemic.

“This is why we believe that – despite the current challenges – the future of advice is incredibly bright especially when it comes to retirement,” Mr Lumsden said.

“Insights from our client base have demonstrated that while many investors preparing for retirement share common goals including building an income stream, balancing growth and risk, and maximising their savings to avoid outliving their wealth, it is an understanding of client attitudes and beliefs that can be most valuable to advisers.”

Mr Lumsden said it also includes the importance investors place on being in control of their financial future and advisers should take a “partnership approach” with clients on key choices being made.

Jeremy Duffield, chairman of SuperEd and Retirement Essentials, added that advisers who are willing to listen to clients and truly understand their retirement needs – given how vastly different retirement income preferences can be – the more they will thrive with contemporary investors.

“Financial advice is about helping people achieve their goals, not simply creating portfolios that are consistent with their investment risk tolerance,” Mr Duffield explained.

“In the retirement phase, goals become particularly important. How do I achieve my goal of spending at this level over an uncertain lifespan regardless of what happens? And achieve my other goals of, say, leaving some money to my kids? How do I make the trade-offs? How do I manage the risks of not achieving my goals, not just the risks of my investment portfolio?”

It comes after the retirement income covenant (RIC) passed into law on Thursday (10 February), which acting chief executive of the Financial Services Council (FSC), Blake Briggs, called it a “historic day” for financial services.

The legislation – which will require superannuation trustees to plan and outline a retirement strategy for members – will take effect from 1 July 2022.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.