Advisers to bridge gap in retirement planning

Yasmine Raso

Senior Journalist, Financial Newswire

19 January 2023

New research from Fidelity International has found 60 per cent of Australian pre- and semi-retirees over the age of 45 were not receiving financial advice regarding their retirement plans, exposing a major gap in advice availability.

Released in collaboration with research consultancy MYMAVINS, the report titled New Life, Old Life revealed an opportunity for advisers to take on a broader role within the retirement planning process to assist retirees beyond their financial needs and more so in building emotional resilience and enhancing their quality of life.

Richard Dinham, Head of Client Solutions and Retirement at Fidelity said the disproportion between the advised and unadvised in the survey showed a real scope for advice to play a more active part in helping individuals take control of their circumstances and experience higher life satisfaction.

“Pre-retirees really need advice. We found that those in the peak of their career and over the age of 45 had the lowest life satisfaction. There was a lot of trepidation about what lies ahead in retirement. There’s a lot of scope for advice and adding value to that cohort,” he said.

“We found two in five were wanting to plan ahead for their transition into retirement, but only 40 per cent were getting advice. 60 per cent of that cohort were not actually receiving any advice at all. There’s a lot of scope for financial advisers to get involved.

“We found 30 per cent were forced to take early retirement due to redundancy or ill health of themselves or a partner. That is quite a concern, so there is scope there for advisers to help with pre-planning and creating contingency plans for those sorts of eventualities.”

The discrepancy between the unadvised and advice gaps suggests known factors such as advice affordability, access and quality have barred pre- and semi-retirees from engaging advisers and experiencing better levels of life satisfaction, financial confidence, resilience and control like those that are advised.

Dinham said the ongoing Quality of Advice Review (QAR), of which a final report was handed down at the end of last year, is seeking to deliver a cost-effective solution to ensure individuals at any stage of retirement have equitable access to advice.

“Advice is critical to achieve better outcomes for retirees,” he said.

“The sooner the Government can enact those recommendations [the better], but we’ll probably start seeing it in the next two to three years. They are really committed to facilitating the improvements.”

“The solution is going to come from the super funds. They are armed and ready. The missing link is the regulatory environment. The super funds know their members intimately and they are ready to reach out to them with sensible,” Jason Andriessen, Consulting Partner at MYMAVINS and the New Life, Old Life research project, said.