Actuaries Institute panel featuring Mercer senior partner David Knox (left), Actuarial Consulting partner at Deloitte, independent consultant and advisor Stephen Huppert and moderator Catherine Nance.

Financial advisers need to consider how to provide more simplified ‘just in time’ financial advice and guidance that Australians can follow themselves, a panel has heard.

The findings, outlined in a dialogue paper ‘Retirement Matters’ from the Actuaries Institute, found amid cost of living pressures, privacy concerns and increased life expectancy rates, Australians are shunning financial advice and instead leaving their retirement planning to a year before they hope to leave the workforce.

One of the key reasons more people don’t seek financial advice is that data and privacy issues are creating concerns that their data could be used to financially harm them. Advisers can overcome this by being transparent with clients about how they intend to use data to help their clients’ retirement incomes, the panel heard.

Authored by independent consultant and advisor Stephen Huppert and former chair of SMSF Association and experienced non-executive director, Andrew Gale, the research highlighted the need for simplified financial advice so people can easily access targeted support to plan their futures and fund their lifestyles. The paper is the first in an upcoming series of dialogue papers to be published by the institute featuring ideas to improve the retirement income system.

Speaking on a panel session hosted by the institute late Monday afternoon to launch the paper, the duo called on the government to establish a regulatory framework to enable superannuation trustees to provide people with targeted help, guidance and advice on issues such as those outlined in the recent Retirement Income Review report. These include assistance on the best age to retirement, paying down debt, age pension entitlements, retirement income needs as well as likely future living expenses.

The paper gives financial advisers food for thought on the role they play in the broader retirement system as superannuation funds prepare to dish out a broader advice offering as part of the Quality of Advice Review.

Gale said people don’t always want detailed financial advice, preferring simple financial guidance and advice they can follow themselves.

“People often want a holistic plan that helps them move through the stages of life ahead of retirement and life after full-time work,” Gale said.

Currently only 10-15 per cent of people receive comprehensive financial advice, though the role of super funds as they prepare to dish out advice will be critical to improving financial and retirement literacy, Gale said.

An audience member asked the panel whether government subsidised financial advice would help improve retirement outcomes, but Gale said a more useful role for government would be around improving financial literacy rates among Australians.

“The big challenge we have is how to best fund incomes in retirement in the future,” Gale said.

“It’s time we gave more attention to additional sources of retirement income, such as part-time work and home equity, which would provide two additional pillars to our existing three-pillar system of age pension, compulsory superannuation and voluntary savings.”

The retirement income system and its interaction with the tax system, social security and aged care system is increasingly complex. Meanwhile, low financial literacy rates among working Australians continues to impact their retirement outcomes.

“People are also often after some general guidance about retirement planning rather than comprehensive financial advice, which can be hard to get and expensive,” Gale said.

“A help, guidance and advice framework would make it easier for people to obtain the support they need. This remains a real need even after the QAR report and the Government’s response to the report.”

Huppert said that people approaching retirement often underestimate their life expectancy, impacting their spending patterns in retirement. He called on the retirement system to look for ways to provide more personalised and engaged conversations between members and super funds in the lead up to retirement.

Other factors discussed include the need for a national longevity strategy that dictates how public policy informs retirement policy and financial abuse of older Australians.

The paper, which highlights several complexities and issues around retirement including the concept of living and working longer amid rising life expectancy factors create a number of opportunities for financial advisers to help write the roadmap for Australians.

“Most retirees aren’t currently receiving financial advice, which tells us that without compulsion, retirement income products don’t sell themselves,” Huppert said.

Australia currently has about four million retirees, with another 670,000 people intending to retire in the next five years, Australian Bureau of Statistics data showed.