The latest research into pre-retirees and retirees sentiment has shown advisers need to concentrate on guiding these clients as to how to spend money to promote a good life for them.
The Fidelity International “Retirement: The now and then” report, based on a survey conducted by independent research firm Mymavins in September, identified five elements that are more important to individuals than wealth and health to achieving a good life in retirement. These five factors are emotional experience, confidence, purpose, control and connection.
To this end, Mymavins partner Jason Andriessen suggested financial advisers can play a crucial role in assisting people to attain a good life in retirement with regard to confidence by shifting their focus from the traditional advice priorities.
“Confidence is really important and you can break this down further: it really is about confidence to spend. And advisers should focus more on consumption than the money,” Andriessen noted.
“If [advisers] can give retirees confidence to spend and confidence that when life happens their spending is resilient, then that [will really turn] the dial in terms of personal happiness.”
The study also showed financial advice benefits its recipients in the immediate term regardless of the wealth or age of individuals either in retirement or approaching retirement.
“There is present value in advice. There are benefits to getting advice right now,” Andriessen noted.
“What this is showing is there are happiness, well-being and life satisfaction benefits immediately from access to services from a financial adviser.
“[Individuals] feel less financial stress, they feel more in control, they feel more competent [and] have better financial knowledge.
“They [also] feel more financially resilient and that leads to confidence and overall feeling happier.”
The report was compiled from results of an online survey of 1514 Australians over the age of 50 in September. More specifically, the total number of participants was made up of 510 pre-retirees, 200 semi-retirees, 400 early retirees and 404 experienced retirees to ensure the study sample was representative.