In the 2024 MFS Global Retirement Survey, which analyzed responses from 701 Australian superannuation members and 306 retirees, it was discovered that only 29% of participants turned to financial advisers while preparing for retirement. Strikingly, this is in contrast to the 55% who preferred to engage with their super funds, and 31% and 30% who consulted financial media and family members, respectively.
The generational outlook differs as Millennials are notably inclined to rely on their super funds or financial media for advice. Interestingly, about 20% of Generation X respondents admit they do not seek external advice resources at all.
These findings come amidst growing confidence in retirement prospects among Australians, with only 28% now expecting not to be able to retire, down from 40% in the previous year. Nevertheless, challenges remain:
- Half of the super members express grave concerns about saving adequately for retirement.
- 25% have altered their retirement investments within the past year.
- Only 23% strongly believe they will retire at their desired age, a decrease from 26% recorded last year.
Josh Barton, Managing Director and Head of Australia and New Zealand, MFS, stated, “It is concerning to see in our survey results how few Australians rely on financial advice to manage their financial affairs.” He added that while government measures aim to fill this advice gap within superannuation, extensive efforts are still necessary for clarity and improvement.
Moreover, the survey discovered misconceptions around investment strategies. For instance, 61% of respondents regarded passive funds as less risky than the overall market. Additionally, 29% believed these funds could potentially offer better returns than the market average. Furthermore, 65% agreed that active fund management allows for picking stocks and bonds that might deliver superior returns.
Barton pointed out, “Critical understanding gaps are likely to persist, such as those discovered by our survey in relation to the risk and performance misnomers associated with passive investing.” He emphasized, “While more retirement plans appear to be within reach, advice remains key to achieving it, even more so today given investment markets have become increasingly complex and difficult to navigate.”
These findings from the MFS Global Retirement Survey suggest that as Australians face increasingly complicated financial landscapes, the role of expert financial advice is crucial. The disparity in advice-seeking behaviors calls attention to the pressing need for awareness and education in financial planning.
