​​Despite high retirement confidence, client-education needed for estate planning

According to Apt Wealth Partners data, Australians with advisers are entering retirement with greater confidence, with 88 per cent of the 889 advised clients surveyed saying they felt confident they could maintain their desired lifestyle thanks to the financial planning they had received.

A further 84 per cent stated they felt their portfolios gave them peace of mind.

“These findings underscore advisers’ commitment to delivering personalised, values-driven financial advice focused on clients’ life goals rather than short-term market fluctuations,” Apt Wealth said.

“Today’s investors aren’t just looking for better returns, they’re looking for advice that fits real life,” said Apt Wealth CEO Andrew Dunbar.

“That means helping clients understand what’s important to them, what the real risks are and how their investment decisions align with the life they want to live.”

The benefits of advice have been well documented, with many industry and independent surveys reaching similar conclusions as Apt. However, Apt also found that this understanding does not fully extend into estate planning and understanding.

According to the same set of data, only 17 per cent of clients feel they have sufficiently educated their beneficiaries on managing their inheritance, and only another 22 per cent regularly discuss estate planning, trusts or gifting strategies with their financial adviser.

While immediate retirement for advised clients is projected to be stable, few remain prepared for the coming $3.5 trillion wealth transfer, with the benefits, peace of mind and security advice provides to retirement not being expanded to how one’s money is used once it is passed on.

“This should be a wake-up call for the advice industry,” Dunbar said.

“Many families have a will, but they don’t have a plan. If you haven’t had the conversation, educated your children or set clear roles, you’re not ready, no matter how sophisticated your estate documents look on paper.”

Dunbar highlights that beyond becoming an issue of not knowing what happens with your money once it’s passed on, it also becomes an issue of risk management.

“When these conversations don’t happen, you open the door to poor decisions, disputes, unintended tax consequences and lasting damage to family relationships.”

This can also be seen as yet another example of the ever-growing advice gap, with younger Australians (i.e. the beneficiaries aforementioned) not getting the same benefits their parents have enjoyed through financial planning.

One method that has been suggested is including children and their input in the advice process, however this can lead to several issues with conflict of interest, requiring advisers to walk somewhat of a tightrope if they wish to adopt this model.