Financial planners add the most value to clients during the transition phase to retirement, according to MYMAVINS, by allowing them to envisage them a happy and financially-secure retirement.
Speaking on a webinar with the Financial Planning Association of Australia, Jason Andriessen, consulting partner at research house MYMAVINS, discussed a Fidelity report on retirement experiences.
“It takes most retirees two years to feel more in control [in retirement] and if we’re looking at life stages where financial planners can add loads of value from a wellbeing and happiness perspective then it’s clearly in the transition phase and helping people recover a sense of control,” he said.
He said many late retirees had found they had emerging needs which they had not anticipated which had necessitated them making changes to their retirement plan. This included the emotional impact of stopping work, need to find purpose in their life, cost of living outpacing income and health or mobility changes.
This indicated there was a role for advisers to help clients plan ahead and consider possible unforeseen circumstances which could arise when they entered retirement.
“There’s a clear message that people underestimated the sense of loss they would experience even if they were in control of their retirement,” he said.
“One of the best things that financial planners do is help people envisage the future and bring it to life. That is a key driver of satisfaction if the person can look forward to retirement and are more likely to be happy and feel in control.
“The good news is advisers are already in this space and are already improving their clients’ circumstances.”
While there was most value for those in the pre-retirement stage, there was still opportunity to add value in the late retiree stage as the retirement transitioned again into needs such as aged care which was a concern for two out of five retirees.
“We have seen late retirees do benefit from advice, when they have an active relationship with a financial planner then they experience less financial stress,” he said.
“They have more competence in investment matters and more capability which then drives more confidence and the feeling of being in control.
“Those with an active advice relationship see benefits in their wellbeing as well as financial state.”