ASFA calls on retirement sector to support advice reform

According to new research from the Association of Superannuation Funds of Australia (ASFA), Australians of all ages have a high degree of trust in professional advisers, as well as advice provided by super funds and industry benchmarks like the ASFA retirement standard.

The research found that those aged 18 to 34 had the most trust in professional advisers, with a net trust score of 68, while those in the 35 to 49 cohort had a trust score of 52. Advisers from a super fund also scored in the positive for these age groups, at 58 and 42, respectively.

The gap closed at older ages, with over 65s reporting a trust score of 50 for professional advisers and 44 for super fund advice, while those aged 50 to 64 had the smallest margin at 44 and 42, respectively.

“Given the high degree of net trust in financial advisers and advisers from super funds, it’s concerning to see how low the use of these sources of advice are. This mismatch suggests that there are significant barriers preventing Australians from accessing the advice they need,” said ASFA CEO Mary Delahunty.

“Although people trust financial advisers as a source of information, the problem is that their services remain too expensive for the average working Australian to access. Sadly, these are the people most in need of quality financial advice to improve their retirement outcomes.”

In order to address this gap, Delahunty called for the broader retirement income sector to “work together” as the government looks to progress the second tranche of Delivering Better Financial Outcomes (DBFO) reforms – which would, among other things, make advice more accessible through super funds.

“The advice in super legislation will reduce red tape and improve the efficiency of accessing advice. It will be a revolutionary step for Australians’ access to trusted advice that will improve their financial wellbeing in retirement,” she said.

“Our research shows how critical these reforms are to ensure that our superannuation system remains the envy of the world, we will continue to work closely with government and with other stakeholders to align the sector to progress these issues as a matter of priority.”

The research also found that just 51 per cent of adult Australians, including around 60 per cent of those aged 65 and above, have consulted any source of information on preparing for retirement.

“It’s concerning to see such a lack of engagement with information about retirement. It means many Australians may end up worse off than they should be in their post-working lives, simply because they haven’t been empowered with the relevant guidance,” Delahunty said.

“This research highlights the need for urgent reform to make high-quality, low-cost advice easily accessible to every Australian worker through their super funds.”

The research found that, while respondents that had consulted an information source on their retirement pointed to financial advisers as the top choice, this still only amounted to 21 per cent.

Friends and family were at the same level, with 21 per cent consulting them, followed by online calculators and other online resources (15 per cent), advisers from super funds (12 per cent), media articles (8 per cent), and social media (6 per cent).

“For those who had consulted at least one information source, older Australians were more likely than younger people to have consulted formal sources like professional advice and advice provided by super funds,” ASFA said.

“Younger Australians were more likely to have consulted informal sources like friends and family, and social media. People in the 18–34 cohort were 15 times more likely to source advice from social media than people aged 65+, leaving them far more vulnerable to scams involving superannuation.”