26 November 2019 

Sky high trust and satisfaction rates from retirees in an
advice relationship

The positive impact of expert financial advice on the confidence of a person about to enter or in retirement must never be underestimated. In fact, more can be done to help educate and guide a greater proportion of non-advised Australians to receive the knowledge, confidence and satisfaction levels of those already in an advice partnership.

This is one of the key findings of new research conducted by Allianz Retire+, which today released fresh insight into the hearts and minds of prospective and current retirees across the nation¹. The research surveyed Australians looking to retire in the next seven years and those currently in retirement.

The results are encouraging for the financial advice profession in Australia. It shows that a high 94 per cent of those Australians who have sought expert advice are satisfied with their advice and have a healthy trusted relationship with their advisers. 63% of this cohort indicated they have been with their adviser for over five years, and one in two has recommended their services, citing a good relationship as the main driver.

“The results emphasise the important role trusted adviser relationships have in helping Australians really retire” said Allianz Retire+ CEO Matthew Rady. “The numbers show a fundamental difference that quality advice makes to the confidence of a retiree. We can also see that advisers should be encouraged by the results as a strong indicator of an existing and growing value proposition.”

Advice Adoption Rates

However, the task towards the conversion of more Australians gaining quality advice is real, with only one in four actively seeking advice from experts. While around half of the respondents believe financial advisers have valuable expertise and deliver a useful service, over 50% of those aged 65+ indicated they would not use an adviser. Why? Cited reasons include feeling financially capable on their own, not having enough funds to invest and the perceived (high) cost of advice.

Of those that do use a financial adviser, over half cited the desire to know more about their financial position and confirmation they were doing enough for retirement. When selecting an adviser, trust was the strongest driver of choice; followed by facilitating the best (tailored) advice; the ability to explain things simply; and reliability. A person's gender also appears to influence what retirees seek in an adviser, with women seeking support and care, while male respondents favoured financial benefit.

Financial Decision Making

The findings also suggest that financial literacy and advice accessibility may be key barriers in the adoption of more Australians seeking quality advice:

• 79% of Australian retirees state they are responsible for their finances and it’s important for them to feel in control of their money, yet;
• Only a mere 44% are feeling secure in their current financial position; and

The response from current retirees is to assume a frugal and conservative retirement investment approach to fund their retirement (75%).

Source of Income in Retirement

Interestingly, nearly half of all respondents cited the age pension as part of their retirement plan. Over a quarter also listed having a superannuation fund and shares as sources of income. The adoption of other types of investments were significantly lower, including managed funds, self-managed super funds, annuities and investment properties.

Rady said: “The main challenge we believe is to feel confident in retirement. These results indicate more can be done to help Australians become financially literate, benefit from an advice partnership and feel confident with their retirement position.”

“With 1,000 Australians retiring a day, there has never been a more pressing need to undertake this research and gain a deeper appreciation of the complexities and barriers at play. We believe the results gained from this research add to our understanding of the important role advisers play in setting up people for a happy retirement”.

Disclaimer

This material is issued by Allianz Australia Life Insurance Limited, ABN 27 076 033 782, AFSL 296559. Allianz Retire+ is a registered business name of Allianz Australia Life Insurance Limited. This material has been prepared by Allianz Retire+ for general information purposes only. It is not comprehensive or intended to give financial product advice. Any general advice provided in this material does not take into account your objectives, financial situation or needs. Before acting on anything contained in this material, you should speak to your financial adviser and consider the appropriateness of the information received, having regard to your objectives, financial situation or needs.

No person should rely on the content of this material or act on the basis of anything stated herein. Allianz Australia Life Insurance Limited and its related entities, agents or employees do not accept any liability for any loss arising whether directly or indirectly from any use of this material. PIMCO provides investment management and other support services to Allianz Retire+ but is not responsible for the performance of any Allianz Retire+ product, or any other product or service promoted or supplied by Allianz. Use of the POWERED BY PIMCO trade mark, or any other use of the PIMCO name, is not a recommendation of any particular security, strategy or investment product.
 

1 Based on Allianz Retire+ survey in 2019 of 702 current and prospective retirees across Australia.