New research from Findex has revealed that Millennials have the most to gain from ongoing financial advice.
The advisory firm’s financial modelling found that if an individual received advice from the age of 35, their net assets could be $664,000 greater by the time they reach 65 than if they had not sought any advice.
The hypothetical example was based on a 35-year-old earning $100,000 per annum and holding a superannuation balance of $50,000.
For Generation X, the difference between an advised and non-advised person was $240,000 in net assets, or a 13 per cent increase when they turned 65. This was calculated using an average 49-year-old, part of a couple, with a super balance of $215,000.
Findex’s The Cost of Doing Nothing When Preparing for Retirement report surveyed over 1,000 Australians aged between 35 and 65 years old.
“Despite the costs of professional advice, a financial adviser can potentially save most people time, money and stress in the long run,” said Matthew Swieconek, head of investment relations at Findex.
Millennials were the most hopeful with 89 per cent believing that professional advice could benefit them in retirement. This was compared to 83 per cent of Generation X and 71 per cent of Baby Boomers.
Although more than eight out of 10 Australians recognised the value of financial advice, only 30 per cent had actually seen an adviser.
The cost of advice was the largest barrier preventing Australians from accessing advice, with 32 per cent of men and 34 per cent of women citing this as the main reason.
Not earning enough to make advice worthwhile was the second reason, followed by individuals looking after their own finances as stopping them from receiving advice.
When asked what would need to change to make them seek an adviser, more than half of those surveyed said a change in financial circumstances such as a big pay rise or receiving an inheritance.
“Many aged between 35 and 55 may turn towards do-it-yourself financial management as a cost-effective solution in the short-term, but this could further hamper their financial gains in the long-term,” Swieconek explained.
“Instead, Millennials and Gen Xers should take a more proactive look at how long-term financial advice could benefit their financial future – seeing it as an investment rather than a transaction.”
