Research: advice can improve retirement lifestyle outcomes

Sunsuper has launched its Value of Advice Report, saying that advised families could be $240,000 better off at retirement. Modelling used in the report demonstrated that an advised 34-year-old Australian couple can maximise their money to pay for:

  • 32 years of trauma cover
  • Six additional years of private education for two children
  • A family holiday every year until retirement

Anne Fuchs, head of advice and retail distribution at Sunsuper, said the research validates the value financial advisers provide to help Australians to achieve their financial goals and retirement dreams.

Fuchs said, ‘Most Australians have a pretty good idea of the lifestyle they want to live now and in retirement. But a lack of financial literacy could be blamed for what people believe they can achieve and what their actual financial situation will be in the future.’

She also said that the $46 billion super fund looks into the affordability of trauma cover because added financial security is important for many families in case of illness. Sunsuper quoted reports from other industry research and said it is conscious about the nine million Australians that have unmet financial needs. 

In December 2016, CoreData surveyed more than 100 working Australians. Roughly 42 per cent of those who had not received financial advice believe they will rely on the aged pension, while 16 per cent believe they will have a good standard of living in retirement.

Andrew Inwood, principal economic researcher at CoreData said, ‘Good advice does of course make you wealthier at retirement, but it also adds value all the way through your life in the choices you can afford to make about schooling, insurance, holidays, housing and personal interests. The important thing to measure is how it adds value to every life stage and enables individuals' life aspirations - that's what we have modelled.’ 

The study also found that out of those who received financial advice:

  • 93 per cent are sure they could fund three months out-of-work
  • 84 per cent pay off their credit card each month
  • 75 per cent believe financial advice is worth more than is costs
  • 7 per cent believe they will need to rely on the aged pension