State Street Global Advisors (SSGA) has uncovered a significant demand for financial advice as Australians head towards retirement.
The 2022 Global Retirement Reality Report — which surveyed over 600 Australians in addition to 3,500 individuals across the US, the UK and Ireland — found that around 40 per cent of respondents didn’t feel optimistic about their own financial readiness ahead of retirement, a figure that has remained relatively flat over the last four years.
According to the report, this financial uncertainty increased with age and was found to be inversely proportional to an individual’s income bracket. Namely, Australians closer to retirement were especially troubled by their finances, with those earning under $50,000 conveying a similar sentiment.
Commenting on the findings, Jonathan Shead, SSGA head of investments in Australia, said more needed to be done to increase the confidence of pre-retirees.
“There is clearly still much work to be done, by both industry and government, in simplifying, explaining and confidence building for our national retirement system”.
Interestingly, as many as 64 per cent of Aussies told SSGA said they would like to receive one-on-one financial consulting from their superannuation fund, while an equal number said they would appreciate a tool to help them safely spend down their retirement savings.
Direct advice from their super fund outranked both education and product, with respondents showing least interest towards in-person or web-based informational forums (53 per cent) to teach them more about their super.
Enabling superannuation funds to provide advice was one of the more controversial recommendations of the Quality of Advice Review (QAR), with the review lead Michelle Levy arguing that this would increase access to advice and lower its cost.
Moreover, SSGA’s report also revealed that despite more Australians reporting a short-term increase in savings both within superannuation and in other savings and investments, as many as 65 per cent of Aussie admitted to being worried about inflation.
With an emerging economic slowdown and rising interest rates, respondents were also concerned about mortgage or rent costs (35 per cent), and about being able to continue to find spare funds for retirement (29 per cent).
Concluding the findings, SSGA revealed women are far less optimistic that they will be financially prepared for retirement (18 per cent compared to 38 per cent for men) and are less confident that they will be able to retire when they want to.
