PROFESSIONAL financial advice has never been more important for Australians approaching or living in retirement.
But for many people, the question is becoming increasingly pressing: even if you can find a financial adviser, can you afford one?
Over the next two decades Australia is expected to experience one of the largest intergenerational wealth transfers in its history. As much as $5.4 trillion is forecast to pass from older Australians to their children and grandchildren.
Managing that wealth alongside superannuation savings, investments and retirement income will require careful planning. Yet at the same time, access to professional financial advice is becoming more limited and increasingly expensive.
The number of financial advisers in Australia has fallen sharply in recent years.
In 2019 there were close to 30,000 advisers operating across the country. Today that number has dropped to just over 15,100, and industry groups expect another 1000 advisers to leave the profession this year.
The decline follows tighter regulation introduced after the Royal Commission into Misconduct in the Banking,
Superannuation and Financial Services Industry exposed serious failures and misconduct across parts of the financial services sector.
The reforms were designed to rebuild trust and strengthen consumer protections. However, many advisers say the added compliance requirements have increased the cost of providing advice and pushed experienced professionals out of the industry.
As a result, the price of financial advice has also risen. The average annual fee is now around $4700 – an increase of about 18 per cent in the past year. For many everyday Australians, particularly retirees or those planning for retirement, that cost can be difficult to justify.
The Federal Government said it is working to make financial advice more accessible while maintaining strong consumer protections.
A key reform package – Delivering Better Financial Outcomes – forms part of the government’s response to the Quality of Advice Review.
The reforms aim to simplify the advice process and reduce costs while maintaining professional standards.
Among the proposed changes is the creation of a new class of adviser who will be able to provide simple financial advice, such as guidance on choosing an insurance policy or answering basic questions about retirement.
The reforms also aim to make it easier for advisers to provide limited or single-issue advice where appropriate, rather than requiring a comprehensive financial plan covering every aspect of a person’s finances.
As the financial advice sector evolves, many retirees may find themselves relying on a mix of professional advice, guidance from superannuation funds and trusted government resources when making important financial decisions.
What remains clear is that as trillions of dollars change hands in the coming decades, the need for sound financial advice will only grow – even as the challenge of accessing it continues.
