Research released by ASFA, the voice of super, today reveals that only 51% of adult Australians, including around 60% of those aged 65+, have consulted any source of information on preparing for retirement.
Accessing good-quality information about superannuation and retirement can help improve retirement incomes, by helping consumers understand and set financial goals and employ strategies to reach them.
ASFA CEO Mary Delahunty said, “It’s concerning to see such a lack of engagement with information about retirement. It means many Australians may end up worse off than they should be in their post-working lives, simply because they haven’t been empowered with the relevant guidance.”
“This research highlights the need for urgent reform to make high-quality, low-cost advice easily accessible to every Australian worker through their super funds,” Ms Delahunty said.
Sources of information
ASFA’s recent survey — which was demographically representative of the population in terms of age, gender, education, and location — asked respondents which sources of information they consulted concerning their retirement.
Possible sources included professional service providers (like financial advisors), advice provided by super funds, information published by the superannuation industry, internet resources like online calculators, the media, and social media.
The percentage of people who had consulted each information source was:
- Professional services (financial advisors) — 21%
- Friends and family — 21%
- Online calculators and other online resources — 15%
- Advisors from super funds — 12%
- Media articles — 8%
- Social media — 6%
For those who had consulted at least one information source, older Australians were more likely than younger people to have consulted formal sources like professional advice and advice provided by super funds.
Younger Australians were more likely to have consulted informal sources like friends and family, and social media. People in the 18–34 cohort were 15 times more likely to source advice from social media than people aged 65+, leaving them far more vulnerable to scams involving superannuation.
Advisors are trusted sources of information
The survey found that Australians of all ages have a high degree of trust in professional advisors, advice provided by super funds, and industry benchmarks like the ASFA retirement standard.
Net trust of each source (the percentage of respondents who trust the source minus the percentage of those who do not) per age cohort was as follows:
Table: Net trust (all respondents, regardless of whether they consulted an information source)
While super funds were some of the most trusted sources of advice, they remain highly underutilised.
“Given the high degree of net trust in financial advisors and advisors from super funds, it’s concerning to see how low the use of these sources of advice are. This mismatch suggests that there are significant barriers preventing Australians from accessing the advice they need,” Ms Delahunty said.
“Although people trust financial advisors as a source of information, the problem is that their services remain too expensive for the average working Australian to access. Sadly, these are the people most in need of quality financial advice to improve their retirement outcomes,” Ms Delahunty said.
Need for advice reform
ASFA is calling for the retirement income sector to work together and progress the second tranche of Delivering Better Financial Outcomes Reforms, which will make quality, trusted financial advice more accessible through super funds.
“The advice in super legislation will reduce red tape and improve the efficiency of accessing advice. It will be a revolutionary step for Australian’s access to trusted advice that will improve their financial wellbeing in retirement.
“Our research shows how critical these reforms are to ensure that our superannuation system remains the envy of the world, we will continue to work closely with Government and with other stakeholders to align the sector to progress these issues as a matter of priority,” Ms Delahunty said.
