The coronavirus has highlighted the need to bridge the advice gap in Australia, according to the head of one of Australia’s largest wealth managers.
The coronavirus outbreak has led to an increase in sequencing risk – when an investor experiences poor performance at “precisely the wrong time in (their) investment time frame”, leading to a massive impact on their ability to retire, according to AMP chief executive Francesco De Ferrari.
“At this point, if I am 60, I’m facing some pretty difficult individual options,” Mr De Ferrari told business and media.
“I either need to work for many more years to bridge the gap, or on average I need to consider a quality of life that’s 25 per cent lower than I had planned. When we plan for retirement, we need to take control of our investments and we need to make some tough, rational decisions. And it is precisely in these moments that we need to have access to professional advice.”
According to Mr De Ferrari, the advice gap is bad and getting worse. One in two adults – around 10 million people – have unmet advice needs, while last year only 12 per cent of Australians received financial advice. And the number of people seeking advice is increasing as the outbreak continues to wreak havoc in financial markets.
“Inquiries in our call centres and to our financial advisers are the highest they’ve ever been as clients in this difficult situation look for advice and direction,” Mr De Ferrari said.
Societies that want “to be fair and care for all people” must ensure that financial advice is available to everybody, he says.
“When we come through the worst, we must use this crisis as a catalyst to address the critical issues, such as the big advice gap we have in this country,” Mr De Ferrari said.
“It’s an issue we must get right for everybody, and not just for the wealthy.”
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