New research canvasses Australia as retirement income exemplar

New global research has underlined the “pressing need for tailored” financial advice to assist retirees.

The research, contained within the Natixis Retirement Index report, has pointed to the number of Australian men and women exhausting their retirement savings but also notes that Australia sits in seventh place overall on the global index.

“The challenge of drawing down retirement savings centres around longevity risk. Some retirees underspend, fearing they will run out of money, while others outlive their savings,” it said.

“All of which underlines the pressing need for tailored financial advice addressing individual circumstances. However, the ongoing advice gap in Australia leaves retirees vulnerable to the challenges of longevity risk in their golden years.”

Dealing with what it described as “the advice gap in Australia”, it noted the government has proposed a financial advice reform package under the Delivering Better Financial Outcomes bill.

“This is aimed at introducing a new class of financial advisers known as ‘qualified advisers’ (QAR) in order to increase the availability and affordability of simple personal advice.

“These advisers will focus on providing basic advice at no charge and will be subject to a ‘modernized best interests duty.’ This is an updated set of standards that financial advisers must adhere to when offering personal advice to consumers, ensuring all personal advice is provided under a single uniform quality standard,” it said.

“The reforms aim to address the industry’s talent shortage by creating new entry pathways and fostering future professionals through structured career progression. This will ensure there are enough skilled advisers to provide comprehensive financial guidance to the growing population of pre- and post- retirees, better meeting the financial needs of Australians.”

“Australia’s retirement system has long been admired for its success in building retirement savings and is seen as a model for other nations to emulate,” it said.

“As the country and wider developed world confront the complexities of an aging population and the challenges of smart decumulation, Australia’s reform initiatives could potentially serve as a global benchmark for retirement policy.”

“Furthermore, the push for enhanced financial literacy and equitable retirement solutions present a global opportunity for learning and adaptation. As Australia charts its course through these challenges, it will provide valuable insights and potentially shape a template for retirement security worldwide.”