Why the retirement boom is a gold mine for financial advisers

It is almost cliché at this point to talk about the many ills the advice industry is facing. Falling numbers of advisers combined with a lack of new recruits, heavy-handed and cumbersome regulation and the continuing hangover from the royal commission – leading many Australians to generally not trust the financial services industry – are all issues that are front of mind for advisers.

Despite this, one niche where advisers have and will continue to thrive is retirement, with both the government and institutions dedicating time and resources into developing retirement offerings.

“Demographically, there will be more people retiring as the Boomers and early Gen X come through,” Nathan Fradley, specialist financial adviser at Fradley Advice, told ifa.

“Those retiring have more assets than any retiring cohort beforehand – this means they both have the ability to pay for advice, and the need to make sure they get it right.”

And getting it right will be vital for many, especially as older, retiring Australians are trying to act as the bank of mum and dad and yet are unprepared to do so.

“They care about their own wellbeing and retirement, they watched their parents scrimp and save, and potentially not enjoy it as much as they could, and they can see their kids coming up doing it tough, so estate preservation and/or the ability to help their kids is a priority,” Fradley said.

This is exactly where the adviser steps in. Often, despite good intentions, those looking to retire and wanting to help their children financially are unaware of what this actually entails.

Pedro Marin, managing director of Marin Wealth, used housing assistance as an example of this on a recent Acenda webinar:

“They do not understand what would happen to their house if a child cannot pay their financial commitments [after receiving help], they just think, ‘I’m helping them. I’m helping them save money and getting them in the housing market faster’.”

Advisers, unlike the direction some financial services are going, also have a competitive advantage in the retirement world – most of their job requires meeting clients in person.

“Advisers are uniquely placed, given the personal approach – we can connect with a generation who may use technology but prefer to know the person they are working with and meet them in person,” Fradley said.

With 700,000 Baby Boomers expecting to retire in the next five years and $3.5 trillion of wealth expected to change hands, assisting and advising those making this transition is a space advisers will continue to thrive in, despite outward challenges from the industry.

For those looking to capitalise on this, Fradley has some advice of his own: “Identify your client types. Design the process around who you best serve. Find 80, 100, 150 people you can work with for good fees, so you have the time to service them properly.

“Just as important, find a network of other advisers. Keep each other accountable to proper fees, no low-bono work. Share success stories, tricks and wins that can benefit all. Remind each other that we do a great job. Community will be essential.”