When the Future of Financial Advice (FoFA) legislation was implemented on 1 July 2013, it was immediately apparent that the onus on planning for retirement was being laid firmly in the hands of each individual.
From finding a qualified and suitable financial planner, to checking their credentials on the ASIC Financial Planners Register, consumers are very much responsible for digging out the information they need. In fact, you could go so far as to say that consumers searching the ASIC Financial Planners Register are actually being misled. ASIC does not check the information that is initially input by the planners themselves – it only has the power to fine a planner if the information is found to be incorrect.
Consumers have every right to feel as though financial planners are simply out to get them. With every of the big four banks having planners involved in a financial scandal over the last two years, it’s difficult to know who to trust. However, that hasn’t stopped YourLifeChoices members seeking professional advice when it comes to managing their finances.
In the most recent YourLifeChoices Retirement Insights survey, 58.12 per cent of respondents had visited a financial professional to discuss or plan their retirement. This was up marginally from the previous year’s survey results, in which 56.73 per cent reported visiting a financial professional. And, when it comes to assessing the value of this advice, 78.6 per cent reported their visit as being beneficial – up from 74.89 per cent in the previous year’s survey.
In a reflection of the increase of those seeking professional advice, fewer respondents said they felt sufficiently financially literate to handle their own retirement needs. Although only a marginal decrease, 56.35 per cent (down from 57.72 per cent last year) reported in the most recent survey that believed they could handle their own retirement income needs.
It’s not only the uptake of professional advice that’s increased – people’s understanding of retirement information has also improved. Last year’s Retirement Insights survey saw 45.09 per cent of respondents report that they found it difficult to keep up-to-date with retirement information, whereas in the most recent survey, only 42.96 per cent reported the same difficulty.
Rather than being put off by the scandals surrounding financial advice and super, older Australians are empowering themselves to take control and act to save their own retirements.
It used to be that when an annual superannuation statement was received, it was simply filed under ‘D’ for ‘deal with later’. Now, however, with all the reports of employers not paying the correct superannuation contributions, people are much more likely to check what has been paid into their super, as what has been paid out in fees and insurance premiums.
Likewise, rather than accept the advice and information given to them by a financial planner, consumers are more comfortable asking the much-needed questions that will help them weed out the proverbial bad egg.
And even the initial difficulties of seeking lost and unclaimed super isn’t stopping people from taking back what is rightfully theirs. Whether it’s a couple of thousand dollars, or the $59,000 discovered in ATO-held super by Ben, it’s better off in your pocket than anyone else’s, as the saying goes.
Rather than being simply outraged when the latest financial scandal breaks, it appears that savvy Australians are learning from the mistakes of others and taking control of their own retirement.
What do you think? Are you capable of seeking and evaluating sound financial advice? Do you feel more in control of your own retirement funding? Should it be the individual’s responsibility to control his or her own retirement?