Younger Australians are increasingly turning to social media for retirement information despite considering it the least trustworthy source, with new research reinforcing calls for financial advice reforms to improve access to guidance through superannuation funds.
A survey of 1,500 Australians by the Association of Superannuation Funds of Australia (ASFA) found people aged 18 to 34 were around 10 times more likely than those aged over 65 to seek retirement information on social media.
At the same time, only half of Australian adults had consulted any source of retirement information, suggesting many people are making important superannuation decisions with little or no guidance.
The findings come as policymakers continue to consider the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms, which would broaden access to affordable financial advice through superannuation funds.
While younger Australians were more likely to rely on informal channels such as social media, friends and family, the survey found professional financial advisers, advisers provided through super funds and industry benchmarks such as the ASFA Retirement Standard remained the most trusted sources of retirement information across every age group. Social media ranked last for trust regardless of age.
The disconnect between trust and behaviour was particularly pronounced among younger Australians.
ASFA found advisers provided by super funds attracted high levels of trust across all age groups, yet relatively few people used them until they reached retirement age, indicating that accessibility rather than credibility is preventing Australians from obtaining advice.
ASFA chief executive, Mary Delahunty, said Australians knew which advice sources they could rely on, but too many were unable to access them.
“Australians know which sources of retirement information they can rely on. The problem is that the sources they trust most are often the hardest for them to reach. Barriers like the cost of accessing an adviser outside of super, and limitations on the scope of advice that can be provided by super fund advisers, really get in the way of people getting the trustworthy information they need.
“These access problems are worst for younger Australians, who are turning to social media for information even though they trust advisers much more as a source of information. This, added to the fact that half of all adults have not sought any information about their retirement, is a strong signal to the industry and policymakers that the current settings mean advice isn’t reaching people where they are in life,” Delahunty said.
The survey also highlighted the long-term consequences of delaying financial advice. ASFA said the benefits of receiving guidance are greatest earlier in life because investment decisions have longer to compound.
According to its analysis, a 30-year-old earning average wages who achieves an additional quarter of a percentage point in annual investment returns could retire with around $40,000 more, while the same improvement would be worth about $7,000 for a 50-year-old.
The report pointed to mounting structural pressures on the advice sector, noting the number of licensed financial advisers has fallen by around 40 per cent over the past decade, while the number of Australians with a super account has increased by about 20 per cent over the same period.
Fewer advisers are therefore serving a growing pool of super members, according to ASFA.
The industry body further argued the advice reforms would help address that imbalance by allowing super funds to send targeted superannuation prompts to members, expanding access to low-cost collectively charged advice on defined topics and introducing a new class of advisers to increase the overall supply of financial advice.
“The advice Australians trust most sits inside their super funds, but current settings make it hard and costly to deliver. Making the super system simpler, with easier access to trusted advice, would change that,” Delahunty said.
This is a constant drip feed by Associations and the Superfunds and is highly selective. Let’s wake up to the fact it isn’t the number of advisers and the need to reduce professional standards in super funds. The issue is the advice community doesn’t want to service low fee paying transactional advice – fact.
The superfunds have the ability to make advice accesible through digital low cost advice providers and yet they focus on the retiree market and members leaving to join SMSFs and retail platforms with high cost face to face solutions. Fact.
Both the above leave millions looking for a trusted source on an easy way and at low cost on their terms. Neither the planning community or the Super Industry has stepped up to solve this because there’s bigger financial fish to fry.
Neither ASFA or the FAAA have working knowledge on how Ai technology solves this yet they become spokespeople for legislative reform to reduce consumer protection.