Historically, advisers have focused on asset gathering, investments, and maximising returns. While effective, there's now a glaring need to prioritise income security during retirement. Despite Australia ranking sixth in the Mercer CFA Institute Global Pension Index, it lacks robust policies focused on retirement income, a gap identified by the report's author, David Knox. Focused retirement income strategies are pivotal to improving retirees' quality of life.
Changes in government policy through the Retirement Income Review and Covenant have prompted the financial industry to revolutionise retirement planning. Marquet's role at Allianz Retire+ exemplifies this transformation, with organisations appointing roles dedicated to retirement decumulation strategies and a full-picture approach to client advice, addressing aspects like age pension entitlements, income needs, and healthcare forecasts.
Making financial advice accessible remains a critical goal for Australia. As Marquet points out, the cost of financial advice needs to be lowered to ensure more Australians benefit from professional guidance. The rise of innovative income strategies and partnerships with product providers is on the horizon, setting the stage for an evolved retirement planning ecosystem.
Retirement fears, primarily of outlasting one's financial resources, loom large. The Financial Services Council's report highlights Australians' underspending due to concerns about longevity risk, costing up to $400 billion. Proposed reforms aimed at boosting advice accessibility and introducing innovative income products could enhance retirement income by 10% annually and increase spending by $400 billion by 2050.
More Australians routinely engage with their finances, spurred by market volatility and increasing life expectancies. Marquet suggests that solutions providing lifetime income, managing risks, and ensuring liquidity will be indispensable. Such comprehensive strategies not only build retirees’ confidence but also offer peace of mind throughout their retirement years.
As financial advisers assume an increasingly crucial role, guiding clients to not just retire with wealth but to manage it wisely, the future of Australia’s retirement landscape looks promising. By focusing on tangible outcomes, fostering industry partnerships, and leveraging innovative solutions, the Australian financial services sector stands poised to redefine global standards in retirement living.
