Research has revealed a majority of consumers believe they need professional financial advice to reach retirement goals, with greater education and innovation needed from advisers and the industry.
In a statement yesterday, Investment Trends revealed the results of its 2016 Retirement Income Report, which surveyed 6,987 Australian consumers over the age of 40.
The report found that two in three working Australians recognise they need to turn to financial professionals to help them reach their retirement goals.
These Australians are most inclined to first turn to either a financial planner or their super fund for this help, the research found.
Further, just 44 per cent of Australians over the age of 40 feel prepared for retirement, down from 49 per cent in 2015, while 51 per cent of those already retired expect to outlive their retirement savings, compared to the 33 per cent who expected to outlive savings back in 2013.
According to Investment Trends, the current suite of retirement products appeal to only a small segment of Australians, with the collaboration of advisers and product providers becoming more important in order to educate and innovate.
Allocated pensions and annuities appealed to just 11 per cent of Australians approaching retirement when the drawbacks were considered, the research found.
Retirement product providers can help through greater product innovation, the firm said.
Investment Trends senior analyst King Loong Choi said, “Super funds and financial planners are best placed to inform, educate and advise Australians on their retirement finances.”
“Retirees who have used a financial planner allocated nearly twice as much of their savings to retirement income products than retirees who have not used a planner. The unadvised, in the meantime, have spent four times more of their retirement nest egg on lifestyle expenditure such as renovations, holidays and new vehicles (car, camper or boats) than planned retirees,” Investment Trends said.
Many Australians are also unprepared for costs associated with aged care, Investment Trends said.
“Only one in three Australians say they either have or intend to seek more information on aged care, most often planning to turn to government services or medical professionals for this," the firm said.
Mr Choi said there is a lack of industry engagement on the topic of aged care and further action is needed from advisers, super funds and product providers.
On the issue of retirement, research director at investment trends Recep III Peker said, “Opportunities abound for new retirement products and retirement product providers ... looking to go direct, and those looking to distribute through advisers, can gain significant market share by innovating on the products offered and the education that supports them.”
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