In its December 2014 Retirement Planner Report – compiled off a survey of 617 financial advisers in late 2014 – Investment Trends found 32 per cent of advisers expect retirees aged 75 years and up to comprise of a greater percentage of their client base by 2017.
By comparison, the research house also found that 35 per cent of planners expect their clients in the accumulation phase to represent a smaller portion of their client base in the same period.
“Planner expectations reflect Australia’s ageing baby boomer generation,” Investment Trends senior analyst Recep Peker said.
“Over the next 25 years the number of Australians aged 65 and over is expected to double and planners are actively shifting their focus to align with this,” he said.
Investment Trends also found that when given the trade-offs between five separate investment objectives, 68 per cent of planners identified “highest income” as the first or second-most important priority for meeting the best interests of retiree clients.
The research house also found “lowest risk” was listed as the first or second priority for 65 per cent of advisers.
“Other factors such as high liquidity, lowest cost and highest capital growth lag behind in terms of importance for this demographic,” a statement from Investment Trends said.
“Highest capital growth and lowest cost are the least important priorities for planners with retiree clients. Just 20 per cent of planners identified lowest cost as a top two priority, while only 8 per cent identified highest capital growth as such,” it said.
The greying demography of advisers’ client bases is obviously well in play (and been so for a few years now). And while it’s encouraging to note that this shift is now being more appreciated by planners, its clear from our own Business Health stats that more is needed and the timeframe is becoming much shorter. Consider 52% of clients are aged 60+, with almost half already retired. Clearly their needs are changing and, yet we have noted these clients have rated their advisers service/product range the third lowest of the nine KPI’s were survey. Further, one third of these clients doesn’t have a will for example. The ball is now firmly in the adviser’s court to decide if this demographic shift represents a threat or an opportunity.