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.
Retirement Planning
What you need to know to get ahead financially
Australians looking to get ahead are being advised to analyse their financial situation, set financial goals and reduce debt whenever possible. ...Read more
Retirement Planning
How to adjust your wealth strategy during COVID
Investors are being urged to be conservative about spending, reduce debt and be careful of assets that are supported by government spending, as they look to adjust their wealth strategies during the f...Read more
Retirement Planning
Should older Australians downsize their property?
Older Australians face the dilemma of not being confident about their retirement outcomes, but are among the wealthiest retirees in the world due to a large proportion of their wealth being tied up i...Read more
Retirement Planning
Self-funded retirees ‘hung out to dry’ by 2020 budget
The Association of Independent Retirees has slammed last night’s federal budget release, accusing the government of overlooking older Australians in its post-COVID-19 recovery plans. ...Read more
Retirement Planning
Work backwards and buffer: How to set (and stick to) financial goals
Working backwards is one of the most effective ways for individuals to set financial goals that actually work, according to a finance director. ...Read more
Retirement Planning
What are self-funded retirees most worried about in 2020?
The national economy, the value of investments and the ability to manage long-term finances are top of mind of self-funded retirees reeling from the effects of a worldwide economic slump. ...Read more
Retirement Planning
Boost your super in the comfort of your own home
There’s a new way for retirees to top up their super through the downsizer contribution without having to move out of their home – and it’s got the approval of the ATO. ...Read more
Retirement Planning
How you’ll retire depends on personal values as much as dollars
Ever wondered why some people accumulate more wealth than others, even when their incomes are on par? It probably stems from their personal values, writes Helen Baker. ...Read more
Retirement Planning
What you need to know to get ahead financially
Australians looking to get ahead are being advised to analyse their financial situation, set financial goals and reduce debt whenever possible. ...Read more
Retirement Planning
How to adjust your wealth strategy during COVID
Investors are being urged to be conservative about spending, reduce debt and be careful of assets that are supported by government spending, as they look to adjust their wealth strategies during the f...Read more
Retirement Planning
Should older Australians downsize their property?
Older Australians face the dilemma of not being confident about their retirement outcomes, but are among the wealthiest retirees in the world due to a large proportion of their wealth being tied up i...Read more
Retirement Planning
Self-funded retirees ‘hung out to dry’ by 2020 budget
The Association of Independent Retirees has slammed last night’s federal budget release, accusing the government of overlooking older Australians in its post-COVID-19 recovery plans. ...Read more
Retirement Planning
Work backwards and buffer: How to set (and stick to) financial goals
Working backwards is one of the most effective ways for individuals to set financial goals that actually work, according to a finance director. ...Read more
Retirement Planning
What are self-funded retirees most worried about in 2020?
The national economy, the value of investments and the ability to manage long-term finances are top of mind of self-funded retirees reeling from the effects of a worldwide economic slump. ...Read more
Retirement Planning
Boost your super in the comfort of your own home
There’s a new way for retirees to top up their super through the downsizer contribution without having to move out of their home – and it’s got the approval of the ATO. ...Read more
Retirement Planning
How you’ll retire depends on personal values as much as dollars
Ever wondered why some people accumulate more wealth than others, even when their incomes are on par? It probably stems from their personal values, writes Helen Baker. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
