Global investment manager Fidelity International has published findings from its online survey of 1,207 Australians aged over 45, revealing approximately 80 per cent of pre-retirees currently receive advice, have received advice in the past, or would consider seeking financial advice.
Of those respondents considering financial advice, the majority stated their preference for a professional financial adviser (55 per cent), followed by accountants (23 per cent), employers (9 per cent), life coaches (8 per cent), registered psychologists (3 per cent), and career coaches (2 per cent).
“Major life changes such as retirement are challenging,” Richard Dinham, head of client solutions and retirement at Fidelity, said.
“Our research shows that pre-retirees approach retirement cautiously, wary of the number of uncertainties around this unknown period of life.”
Moreover, the research suggests advised retirees have a better quality of life, with respondents reporting higher self-esteem and a sense of identity (72 per cent), greater emotional resilience (67 per cent), enhanced capability (70 per cent), and greater purpose in life (59 per cent).
“With so much evidence of the intangible benefits of advice, there is a strong argument that financial advisers should embrace the drivers of quality of life and intentionally enhance the client’s sense of purpose, financial capability, resilience, sense of control, day-to-day emotional experience and social interaction,” Mr Dinham added.
According to the Fidelity research, three-quarters of retirees expect their financial adviser to help align their financial decisions with their values, as well as help them make “confident financial decisions”.
Additionally, the majority of pre-retirees said they believe financial advisers can play a role in building their emotional resilience to “major life changes”.
However, despite acknowledging the importance of the service, a large group of respondents flagged affordability constraints.
Approximately 30 per cent of pre-retirees said they do not believe they can afford financial advice, with a quarter claiming they cannot justify the cost.
“It appears that advice is being priced out of reach of the people that could benefit most,” Mr Dinham said.
Mr Dinham said advisers could consider reducing upfront fees and recouping shortfalls over time by developing a long-term relationship with a client.
“This is not ideal in a professional practice, introducing conflicts that may not be in the client’s best interest,” he conceded.
Alternatively, advisers could withdraw services to “price-sensitive prospective clients”, or help build the client’s understanding of the value of the advice.
“Our research shows that if the adviser can show the client that they can address their greatest concerns, they will be more willing to pay their professional fees, which means more Australians will be able to access the advice and support they need to achieve a comfortable retirement,” Mr Dinham concluded.
so an unintended consequence maybe? Make it harder, more costly, more risk to the process, activist regulator that was found to be wanting now over reacting, and the price increases – lordy who would possibly have thought that was possible.
The whole concept is the cost is less than the benefit and advisers and for practices are forced to pay for asic tpb increased pi increased levies and drowning in clients. Maybe these people who’re too cheap, shouldn’t receive advice?