Recent research by MFS Investment Management revealed that a slim 29 per cent of Aussies are turning to a financial adviser to figure out their retirement plans, with 30 per cent preferring to heed the advice of their families and 32 per cent choosing to tailor their financial futures based on advice from their super fund.
Of the 29 per cent opting for an adviser, over half chose their planner based on the fees they charged, with their level of experience or expertise occupying second place.
The survey further revealed that 34 per cent of men sought professional financial advice prior to retirement compared to just 24 per cent of women.
Commenting on these findings, MFS Investment Management senior managing editor, Marian Poirier, said the potential for advisers to increase their presence is immense.
“We see enormous potential for advisers to provide a greater and more specialist role in providing asset allocation advice to superannuants, especially women who remain under advise despite their working lives typically being more varied and punctuated by life events,” Ms Poirier said.
MFS also found that Australians were particularly keen on increasing the number of ESG investments in their superannuation portfolios, with 74 per cent of those surveyed expressing an interest in more ethical behaviours.
The desire or interest in ESG investments was particularly common among Millennials at 83 per cent, versus 72 per cent of Generation X-ers and 65 per cent of Baby Boomers.
Ms Poirier said that ESG investing was changing the landscape for investors and those who advise them.
“ESG investing continues to transform the way in which investors view and allocate their capital, and while quality long-term, purpose-focused investments inherently integrate ESG, superannuation funds are responding to demand for greater depth and diversity of investments that target change and impact,” she said.
Moreover, she noted that the large volume of noise associated with ESG investing represented an opportunity for financial advisers to engage overwhelmed clients.
“We see a growing role for advisers to educate investors on the many shades of green and ESG within offerings, along with pointing out the differences between asset managers that integrate ESG into their overall investment approach and those that approach it strictly from a product perspective,” she said.
Moreover, while Australians remained mostly optimistic about their retirement, concerns around longer work lives in the wake of the COVID-19 pandemic have been felt by many, but most prominently by those under the age of 45. This, Ms Poirier stressed, creates further opportunities for advisers.
“The shock and persisting uncertainty caused by the pandemic has undoubtedly left an indelible mark on younger retirement investors, and their concerns need to be properly addressed for them to get back on track, with a deeper appreciation that uncertainty and opportunity are often key to long-term investing,” Ms Poirier concluded.
I reckon only 30% of the population have any money
Who could blame them? The Royal Commission exposed the big players for ripping off clients and the FP community allowed the big players to lay the blame on the planning community. If the planners had fought as hard as the MFAA did then we wouldnt be in the mess we are in.
How’s that intra-fund ongoing fee “for advice” arrangement (your default super fund is charging) going? If they’re not getting advice from the fund, these super funds must be charging fees for no service. lol
That’s sad. Perhaps rather than criticise the people not using advisers I’d take the data as reinforcing the inward focus the industry has had for decades. The data is saying that the industry doesn’t garner confidence or value for money with the majority of the public. This further supports why we need recognised high level education ( whether you think the regs and courses are right or wrong for you ) and a generational change. We need not to criticise the public or the government/regulators but become more (positively) critical of ourselves.
I’ve worked across multiple licensees, both institutional and independent, over a couple of decades and dealt with a few hundred advisers. Of all the advisers I would only refer family members to less than a dozen. And those I would refer are exceptional across all the required disciplines and constantly looking to improve themselves and their businesses. I’m not suggesting the other advisers were not nice competent people because almost were. And interestingly some of the nicest and most engaging were the ones I’d least refer to.
Given the high level of demand for advice our practice is experiencing, as are many other advisers, I don’t think there would be many advisers that would have the ability to deal with any more new clients at present!
I closed the doors for now (perhaps until Feb).
bitcoin and crypto are great sources of income, go there
Friend’s advice doesn’t come with a 100 page unreadable SOA, and often comes with a beer around the BBQ.
Bring back the ROA on a beer coaster then?
It is probably more effective than a 100 page SOA which no one reads or understands.
When every fund manager is ESG driven, how will fund managers then product discriminate themselves in the market?
Why would people see advisers after the Governments concerted efforts to say how bad and dodgy they are and how much to blame they are after the Royal Commission.
I can’t remember a positive comment the Government has made about financial planners so what can you expect. They do seem keen on Robo Advice and contacting your super funds as they are a good trusted source of advice.
Of course not. They come to advisers afterwards to fix the problems or refine.
What percentage have problems?
The only time I used an adviser was because I couldn’t invest in the fund I’m in because their requirement was that new investors have to go via an adviser. I paid the adviser for the administration service and haven’t needed to speak to them since. I’m a self funded retiree and my fund continues to perform above my goals. I use the “help desk’ at the fund if I need general guidance about the fund. Admittedly, my background is in the industry, just not as an adviser. Tell me how an adviser would add value to my situation?
Anonymous – Advisers add value beyond product or investment selection which you seem to think is all they do. I am also from the industry (all my working life) but myself and my family use an adviser who over the years has added tremendous value and peace of mind to our family. Adviser/planner help in setting the strategy, then getting your structure right with right assets in right hands then cover contingencies for changes in circumstances and also with various insurance and then provide the discipline to make it happen. Good on you if you want to do all the yourself – for us we love life with our planner assisting us.
You don’t know what you don’t know
Given that the stat’s have always been that only about one of every eight Aussies seeks financial advice, the 29% represents a significantly better number. That said, it’s still WAY below where it should be. Mind you, with so few advisers to choose from and the costs being made prohibitive through red tape, we can’t be surprised that seven out of ten Aussies don’t engage with an adviser for retirement advice.
Some uninformed family members (who are not licensed financial advisers like us) told their family members who are clients of us to sell into cash during the first wave of Covid early in 2020. Our clients are lucky they listened to us and not them…We know how much that would have cost them if they did…Millions! I know similar stories like this happened all over Australia. This is yet another example of the value of advice. Do Jane Hume and her government colleagues even care?
Of course she does not care nor any of them. her single biggest care is doing everything in her power to turn the whole advice process digital and get rid of or at the very least limit the amount of pesky planners out there.
No, her single biggest care is getting re-elected. What happens to advice (and advisers) is completely irrelevant.
Apparently Tik Tok and Insta are a good source of advice.