All Australians approaching retirement should seek financial advice as they deal with sequencing risk, longevity risk, inflation and interest rate risk, and significantly larger amounts of money than they have ever dealt with before through their superannuation, according to Greg Medcraft.
The Australian Securities and Investments Commission’s (ASIC) chairperson delivered this message in a speech on ASIC and Australia’s ageing population at a Brisbane Stakeholder Event, adding the corporate regulator was concerned about seniors having access to quality financial advice that met their changing needs through retirement.
“We might wonder whether we are at the stage where all people should get financial advice as they approach retirement,” Medcraft said.
“Market shocks that occur in the ‘retirement risk zone’ – five to 10 years prior to retirement – can be the most damaging. There is significant sequencing risk at or near withdrawal from the paid workforce, and there is limited time available to recover.”
Medcraft said ASIC was conducting surveillance work in financial advice in a number of areas including the appropriateness of advice to address retirees’ long-term objectives. It was also looking at how financial advice dealt with the suitability of self-managed superannuation funds (SMSFs) for ageing clients, particularly emphasising that advice was not just about establishing an SMSF but also about appropriate exit strategies if the person became incapacitated.
ASIC was also looking at scams, frauds and financial abuse of the elderly who were vulnerable to this.
On robo-advice, while ASIC was supportive of it, Medcraft said not all seniors would benefit from the increase in digital accessibility of products.
