POWERED BY MOMENTUM MEDIA
People with financial advisers retire better off
People who receive financial advice are almost $100,000 better off at retirement than those who do not receive advice, according to the Financial Services Council (FSC).
A 30-year-old would save an additional $91,000, a 45-year-old would save an additional $80,000 and a 60-year-old would save $29,000 compared to those without a financial adviser, according to the independent research commissioned by the FSC and conducted by KPMG Econtech.
The findings highlighted the importance of getting the Future of Financial Advice (FoFA) reforms right, according to FSC chief executive John Brogden.
"The Government will have done all Australians a great disservice if the reforms make quality financial advice less accessible," he said.
People with an adviser were also at least four times more likely to hold some form of life insurance, the research found. The finding was supported by other industry studies compiled by KPMG showing those who received financial advice had on average $260,000 worth of life insurance cover compared with only $100,000 for those who purchased insurance directly.
"Given 95 per cent of working Australian families do not have adequate levels of life insurance, increasing access to advice is critical if we are to help more Australians adequately protect their families from financial hardship," Brogden said.
The research was based on data from three large financial advisory networks, including approximately 3.4 million accounts for the 2005-06 to 2008-09 financial years, covering a wide demographic and the sample was representative of the Australian population, according to the FSC.
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The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation as a bequest vehicle.
Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
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