Invest
Financial advice can’t focus on superannuation
For an Australian earning $80,000 a year, there’s no point in seeking financial advice about superannuation for retirement when it realistically makes up less than one-fifth of that individual’s money, according to a wealth giant’s CEO.
Financial advice can’t focus on superannuation
For an Australian earning $80,000 a year, there’s no point in seeking financial advice about superannuation for retirement when it realistically makes up less than one-fifth of that individual’s money, according to a wealth giant’s CEO.
Speaking at the Morningstar Individual Investor conference in Sydney, AMP CEO Francesco De Ferrari said that superannuation on average makes up only 18 per cent of Australians’ wealth.
“I find it very interesting that when I hear people talk about wealth normally, they talk about superannuation and how you’re investing that piece of your wealth for your retirement.”
Especially so when “Australians love their real estate and so 60 per cent of wealth in Australia is invested in bricks and mortar”, he quipped.
Noting that there is very little savings outside of superannuation, the CEO said “this is driven by a number of the tax laws and is very rational behaviour”.
According to Mr De Ferrari, when it comes to financial advice, “the focus on super isn’t enough”.
As a result, the provision of advice to the average Australian earning $80,000 a year should not start with superannuation either.
“You really have to look at the overall picture and where effectively does advice help?” he questioned.
Instead, he said it was crucial for Australians to have access to the following as advice:
“You want to start with how you balance the budget; how you save more; how do you deal with all this consumer lending – and new business models that are out there and make it easy to buy stuff when you don’t have the money; how do you build financial discipline; and, the most important decision is – if you look at how the wealth is invested – is what will you do with your home and your mortgage.”
“And only when you tackle this can you get a whole picture as to: is your lifestyle effectively sustainable when you want to retire?”
This is a “ big concept” that Mr De Ferrari said is now challenging institutions such as AMP, and the CEO said they are reflecting on “what are the points in your life when it really matters to get real advice, and where effectively you can do it yourself or you can be supported by technology in doing that”.
Considering this sporadic and disjointed need for assistance, Mr De Ferrari went on to ponder whether there is even a future to wealth management in Australia.
For the CEO, the answer is still “unequivocally yes.”
“I think this is a huge societal need, and getting wealth and financial advice right is absolutely critical, especially in the current environment where markets are very tricky, and prices are at an all-time high.”
About the author
About the author
Advice
How to make financial advice more affordable
Recognising that financial advice needs to be made more readily available to Australians through their super funds, one advocacy group is calling for the widespread uptake of a “record of advice” ...Read more
Advice
Why it might be worth seeking out a financial adviser
Good financial planning is about doing the small things consistently over time, a private wealth adviser has outlined while touting the benefits of good financial advice. ...Read more
Advice
Knowing the signs: How to recognise financial or economic abuse
The stress caused by COVID-19 has caused a spike in the occurrence of family violence, but less attention has been paid to financial or economic abuse, which is often “invisible” in nature. Would ...Read more
Advice
The argument for $200 financial advice
Ahead of the release of the long-awaited Retirement Income Review, one advocacy group has called for better access to affordable information, guidance and advice for Australia’s retirees. ...Read more
Advice
Real estate agents can’t tell renters how to use their super: ASIC
The corporate regulator has issued warnings to a number of real estate agents after it was revealed that some had been advising tenants to pay their rent by applying for early access to superannuati...Read more
Advice
Companies finally figure out that Aussies don’t like being left on hold
Waiting on hold could be a thing of the past, thanks to COVID-19, with Australians no longer willing to spend hours on the phone to communicate with financial institutions and service providers. ...Read more
Advice
Here’s why advice is a good idea
Four-fifths of retirees have not sought financial advice during COVID-19, despite three-quarters of them also expressing a lack of confidence around how long their hard-earned savings will actually la...Read more
Advice
Investment ads must be ‘true to label’ after corporate crackdown
In a win for potential investors, consumers must only be given “clear, balanced and accurate information” in any investment product advertisements, fund managers have been warned. ...Read more
Advice
How to make financial advice more affordable
Recognising that financial advice needs to be made more readily available to Australians through their super funds, one advocacy group is calling for the widespread uptake of a “record of advice” ...Read more
Advice
Why it might be worth seeking out a financial adviser
Good financial planning is about doing the small things consistently over time, a private wealth adviser has outlined while touting the benefits of good financial advice. ...Read more
Advice
Knowing the signs: How to recognise financial or economic abuse
The stress caused by COVID-19 has caused a spike in the occurrence of family violence, but less attention has been paid to financial or economic abuse, which is often “invisible” in nature. Would ...Read more
Advice
The argument for $200 financial advice
Ahead of the release of the long-awaited Retirement Income Review, one advocacy group has called for better access to affordable information, guidance and advice for Australia’s retirees. ...Read more
Advice
Real estate agents can’t tell renters how to use their super: ASIC
The corporate regulator has issued warnings to a number of real estate agents after it was revealed that some had been advising tenants to pay their rent by applying for early access to superannuati...Read more
Advice
Companies finally figure out that Aussies don’t like being left on hold
Waiting on hold could be a thing of the past, thanks to COVID-19, with Australians no longer willing to spend hours on the phone to communicate with financial institutions and service providers. ...Read more
Advice
Here’s why advice is a good idea
Four-fifths of retirees have not sought financial advice during COVID-19, despite three-quarters of them also expressing a lack of confidence around how long their hard-earned savings will actually la...Read more
Advice
Investment ads must be ‘true to label’ after corporate crackdown
In a win for potential investors, consumers must only be given “clear, balanced and accurate information” in any investment product advertisements, fund managers have been warned. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
