The latest industry research into attitudes on retirement, conducted by Rice Warner and commissioned by ING Australia, has revealed individuals from generations X, Y and Z believe they will need between $1.5 million and $1.75 million in savings to fund their retirement, but do not know how to go about achieving it.
“As a volume that’s pretty big when you compare it to the ASFA (Association of Superannuation Funds of Australia) retirement standard as a benchmark,” ING Australia national wealth sales manager Tim Hewson told selfmanagedsuper.
“But if you feed that into whether they have a plan for retirement, the majority of them don’t and 25 per cent will say ‘I’ll go and stick my head in the sand about it’.
“There is a high proportion saying ‘I’m doing something about it and I’m going to seek advice’, but a lot of them still don’t know where their super is invested, let alone how it’s invested.”
According to Hewson, the research indicates there remains a real need for advice, which in turn means opportunities exist for financial planners to service new clients, particularly among younger members of the population.
Further, he noted generations Y and Z wanted to seek guidance about their wealth goals from financial advisers before anyone else and the number one priority across all generations was to put a retirement plan in place.
However, the value of advice from a dollar perspective was still an issue advisers needed to overcome, the research showed.
The results indicated baby boomers are prepared on average to pay $315 for an annual strategic financial plan delivered face-to-face, while people in the generation X cohort were only willing to pay $232 for this type of service.
Generations Y and Z were willing to pay slightly more for an annual financial plan on average, nominating $316 and $394 respectively as the fee they thought acceptable.
“The real challenge too is if you ask them to rank what they get by way of value back out of the adviser, they will rank fees as number one,” Hewson noted.
“So you’ve got this misperception of how much full, comprehensive advice costs, but it’s also the most important thing in terms of selecting and getting value out of an adviser.”
The research was conducted in July, with more than 2000 participants who were between the ages of 16 and 64.