22 May 2023

Despite the compulsory superannuation guarantee being over 30 years old in Australia, a worrying majority of Australians (2 in 3) fear they will not have sufficient financial resources to retire.

In research from YouGov commissioned by Findex, we explored how Australians are preparing for retirement and how professional financial advice factors into this. The survey of over 1,000 participants focused on those in the early planning stages of retirement to those in the process of retiring* across metro and regional areas.   

The older, the more unprepared

Set against uncertain economic environments and frequent interest rate hikes, our findings show the closer Aussies are to retirement, the less confident they are about having the funds required. The majority (52%) of Baby Boomers and 38% of Gen X noted they are ‘not confident’ of having the money needed to retire compared to 31% of Millennials.

This suggests most Aussies have adopted a ‘kick it down the road’ mentality to preparing for retirement. But when the time eventually comes, they’re faced with the reality that their existing savings and superannuation balance are insufficient in this economic climate.

According to the Association of Superannuation Funds of Australia Retirement Standard a retiree today needs upwards of AUD$500,000 in their super balance. This sits well above the national average of AUD$356,000 and $288,000 respectively for men and women in their early 60s.

Pairing with this, our research also revealed one in two Australians don’t believe they have a good understanding of the financial resources needed for a comfortable retirement. Gender disparity was additionally apparent in financial literacy where women were more likely to report their financial understanding as ‘poor’ (27%) compared to their male counterparts (15%).

Never too late for professional advice

In terms of seeking professional advice for retirement preparation, while 80% believe professional financial advice could benefit them in retirement only 30% had sought advice, with women (24%) less likely than men (37%) to have received professional advice. Furthermore, the closer respondents were to retirement age, the less likely they were to consider professional advice. (‘unlikely to get professional advice’: 49% Baby Boomers, 34% Gen X, 22% Millennials).

At a time when many Australians are currently struggling to manage their finances, our financial modelling shows it’s never too late for someone to benefit from advice even if they’re less than ten years away from retirement and this holds true for people at most income levels.

Seeking professional financial advice should be viewed as good life hygiene like scheduling a dental check-up with a qualified dentist. And with the cost of living continuing to increase and Australians living longer, the reality for most people – particularly women – is not doing anything today will actually cost you. Most Aussies simply won’t have the funds they need to live a comfortable retirement if they don’t take a proactive approach to secure their financial future.

What is stopping Aussies from preparing for retirement

The main misconception uncovered in our research centred around the common perception that the cost of financial advice was too expensive and outweighed the potential returns. Of the barriers stopping Aussies from getting advice: 34% cited the cost of advice, 32% don’t feel they earn enough to make it worthwhile and 19% said procrastination.

The cost of advice is undoubtedly a barrier for some people. However, our projections demonstrate the value of advice where Aussies stand to gain 8% to 29% in benefits depending on the age they start.

A financial adviser doesn’t only provide guidance on investment strategies that align with your goals and risk tolerance. They provide behavioural coaching, asset allocation research and management and tax savvy planning – areas that DIY investors can often overlook and can add enormous value to wealth creation over time.

While there is clear appetite and need for wealth management advice, to help Aussies unlock their full financial potential Findex is addressing the concerns around cost and value head on through offering tailored pricing structures, transparency and consistently adding value – all of which is underpinned by acting in the best interest of the client.

To learn more on how ‘doing nothing’ is potentially costing Australians millions of dollars in retirement, download ‘The cost of doing nothing when preparing for retirement’ and discover the misconceptions about financial advice that are preventing Australians from accessing the help they need to improve retirement outcomes.

*Survey focussed on over 1,000 respondents aged between 35 to 65 years.

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