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Advice leads to super top-ups

Financial advice played a critical role in helping people reach their retirement goals, with advised investors most likely to make extra personal contributions to their super fund, according to a new report from State Street Global Advisors (SSGA).

The “Australian Retirement Vision Survey”, conducted by Rice Warner and based on a survey of 1200 super funds and SMSF investors, revealed that, unsurprisingly, the most knowledgeable and engaged segments were the most likely to make extra contributions to their super accounts.

Overall, 40.6 per cent of investors made personal contributions to their super in the 12 months before the survey, with that figure largely driven by older and higher net worth investors (HNWI).

The report said advised investors were particularly likely to make personal contributions, with almost half boosting their super in the past year compared to only one-third of unadvised investors.

In addition, during the crucial pre-retirement stage, 48.1 per cent of advised investors topped up their super compared to just 32.5 per cent of unadvised pre-retirees.

The report showed one-third of investors lacked a general understanding of basic super concepts, but despite that knowledge gap, an overwhelming majority of Australians would like to manage their own finances, although most would also like expert guidance and support to empower their decision-making.

As a result, investors continued to seek information from a variety of sources, with older, retired and high net worth investors most likely to select financial planners as their key source of support, it said.

It also revealed six out of 10 Australians expected their current standard of living to remain the same after they retired, and in fact many had high expectations for post-retirement incomes, with a median of $982 a week.

This was significantly higher than the Association of Superannuation Funds of Australia Retirement Standard of $443 a week for a modest lifestyle and $767 a week for a comfortable lifestyle.

“The research reaffirms that investors want to react with their advisers in a variety of ways, underscoring the need for flexible and scalable advice models that can cater to both self-directed decision-makers and more traditional, holistic advice clients,” SSGA investment solutions group chief investment officer Dan Farley said.

“This research shows that while many investors are feeling more confident about their retirement prospects, there is still a significant proportion that is confused about super and uncertain about whether their investments will be able to sustain the lifestyle they aspire to leading in retirement.”

Surveyed participants were made up of 34.8 per cent SMSFs,  37.7 per cent not-for-profit and  27.5 per cent retail investors.

SSGA is the investment management business of State Street Corporation.

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