Most clients say retirement advice suits their needs

By

November 15, 2017

It goes without saying that preparing for retirement is a common concern among advised clients and Australians in general. Articles stipulating how much individuals need to retire on are almost a daily offering in much of the personal finance media, so it’s worth considering how other advisers are tackling the million-dollar question.

While advisers know how much a client needs for retirement depends on their personal circumstances, desires and spending patterns, the question could be asked: Is the advice industry on target for preparing Australians to meet their retirement needs?

Or put another way, are those seeking financial advice getting the help they need with their retirement plans?

 Data sourced by Adviser Ratings suggests the answer is a resounding yes.

For those seeking financial advice, organising retirement plans is a key concern. This analysis of more than 10,000 client reviews indicates that 85 per cent of individuals seek advice on one or more aspects of their retirement. There are four related categories where clients have indicated that their advisers have helped:

  • Building super
  • Preparing for retirement
  • Self-managed super funds
  • Estate planning

Analysing the data further, the advice sought by different age groups reveals some particularly surprising results.

The five age cohorts analysed were under 35, 36-45, 46-55, 56-65 and 65+. The data reveals consistency across the age groups when it comes to seeking advice in relation to retirement. In fact, ‘building super’ is the most sought after category of advice (among 18 overall) across all age cohorts. The percentage of people getting advice on this area in the youngest and oldest cohorts is 62 per cent and 63 per cent, respectively. In the three middle cohorts, 66 per cent of people receive advice about building their super.

When all the categories related to planning for retirement are taken into account, again, there is consistency across age cohorts. Analysis shows that 20 per cent to 25 per cent of all clients get advice about SMSFs. Less than 4 per cent of these clients seek advice around aged care. Given the fact that Australia has an ageing population, this particular area may be under-serviced by advisers, and further expertise should be committed to this area in order to assist this growing market.

Almost everyone (96 per cent) who sees a financial adviser feels that their adviser explained how their advice would help their individual circumstance and needs. This metric is not dependent on any nominated monetary value. Rather, advisers are helping people plan to satisfy their financial needs based on the individual’s personal goals. It’s not about (nor should it be about) a particular nominal value that will satisfy every person who seeks advice. Rather, it’s a matter of how much each individual (or family unit) will need to live retirement as they choose. This is the real value of advice, helping determine an individual’s goals and implementing strategies in order to achieve them.

Rather than scaring people into action because they will need X amount of savings in retirement, the industry could promote the positive story of how advisers can tailor solutions for individuals and families, to help them live the retirement they want.

Rodney Lester is consumer and adviser services director at Adviser Ratings.


TOPICS:  Retirement planning