Retirement
You probably shouldn’t be taking wealth advice from your employer
Most Australians are choosing their superannuation and managed funds based on their employer, but this really isn’t a good idea, a research agency has said.
You probably shouldn’t be taking wealth advice from your employer
Most Australians are choosing their superannuation and managed funds based on their employer, but this really isn’t a good idea, a research agency has said.
According to the latest Roy Morgan polling, 17.1 per cent of Australians are purchasing wealth management products through a financial professional, meaning 82.9 per cent are more reliant on their employer. That was based on the 12 months to the end of March 2018.
“This research shows that with only around one in six obtaining their wealth management products through a finance professional, there is a big opportunity to expand their use,” Roy Morgan industry communications director Norman Morris said.
“Given the complexity of this market and rule changes, professional advice is probably necessary for most, particularly as balances grow, but it appears that only when balances approach a few hundred thousand dollars or retirement approaches that advice is sought.”
In light of the royal commission’s worrying revelations about the prevalence and ramifications of poor advice, Australians could be forgiven for their reluctance.
Nevertheless, Mr Morris noted that most employers are “unlikely” to have the resources needed to provide comprehensive financial advice and this presents a challenge given most Australians’ superannuation choices are influenced by their employers to some degree.
“The challenge for professional advisers and wealth management customers is how to provide advice to low value customers and how to get them more involved in a topic of little interest to them,” he said.
Roy Morgan classified financial professionals as financial planners and advisers, and accountants.
By age group, those born before 1946 were most likely to purchase wealth management products through a finance professional (46.5 per cent) followed by those born between 1946 and 1960, (31.7 per cent), those born between 1961 and 1975 (17.0 per cent), those born between 1976 and 1990 (7.4 per cent) and those born between 1991 and 2005 (4.1 per cent).
The research house explained that older Australians were more likely to have purchased a product through a professional due to their higher balances and retirement needs.
Those born between 1946 and 1960 made up the highest proportion of clients (39.9 per cent) followed by those born between 1961 and 1975 (27.5 per cent), simply because these two generations are the most highly populated.
According to Mancell Financial Group, those who receive advice also need to make sure they implement it.
Recognising that most Australians will never seek advice, the advice firm said the small subset of Australians who receive advice but fail to implement it are at risk of “self-inflicted penalties”.
“A nagging issue may seem inconsequential at the time, but often we don’t find out we’ve made a financial mistake until much later in life. Or alternatively, after life has ended,” Mancell said.
For Australians who refuse to pay for a financial adviser, there remains hope.
According to US-based financial wellness think tank Financial Finesse, employers that implement financial coaching and wellness programs are more likely to have employees engaged with their wealth.
Looking back on 2017, the group found that employees who repeatedly used their workplace’s financial wellness benefits were more confident investors, twice as likely to feel on track for retirement and less than half as likely to experience “unmanageable financial stress”.
Financial Finesse found this after tracking employees’ use of its financial helpline and personalised financial education plans, as well as access of ask-a-planner services.
Join the nestegg community
We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians
Your email address will be shared with nestegg and subject to our Privacy Policy
Join The Nest Egg community
We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians
Your email address will be shared with nestegg and subject to our Privacy Policy
Why retirees and soon-to-be retirees need to reassess their finances right now
Retiring soon and worried about your wealth? You aren’t alone
How to avoid crystallising a loss with your super
The 4 biggest financial risks facing self-funded retirees
Is your nest egg at risk?
Canberra: Elder abuse to be outlawed, employment encouraged
6 ways COVID-19 is hurting self-funded retirees
‘Common sense’ change to WA land tax
Retirement Planning
Why retirees and soon-to-be retirees need to reassess their finances right now
Investors should brace for the reality of the underlying economic situation to “kick in at some point” – which could have dire consequences for retirees and anyone who is looking to retire in th...Read more
Retirement Planning
Retiring soon and worried about your wealth? You aren’t alone
The economic impact of COVID-19 will have more of a sting for Australians approaching retirement than it will hurt current retirees, analysis of a new survey has revealed. ...Read more
Retirement Planning
How to avoid crystallising a loss with your super
Australians approaching retirement should be very wary of government programs that encourage them to withdraw their super when the market has bottomed out when other options are available, a chief exe...Read more
Retirement Planning
The 4 biggest financial risks facing self-funded retirees
Australia’s current retirement income system is riddled with systemic flaws that are detrimental to the financial wellbeing of retirees. But what are the biggest risks? ...Read more
Retirement Planning
Is your nest egg at risk?
Middle-income Australians are being encouraged to spend their retirement nest eggs or lose access to more disposable income from the aged pension, according to new research. ...Read more
Retirement Planning
Canberra: Elder abuse to be outlawed, employment encouraged
Canberra has revealed a new city plan aimed at supporting its ongoing development as a city that values the involvement and employment of older people. ...Read more
Retirement Planning
6 ways COVID-19 is hurting self-funded retirees
Self-funded retirees have been overlooked in government support measures to cope with COVID-19, an advocacy body has flagged. ...Read more
Retirement Planning
‘Common sense’ change to WA land tax
Western Australian home owners who are required to move into full-time care will soon be exempt from land tax on their former residence, the state government has revealed. ...Read more
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.