Australians who received comprehensive financial advice had an average of 22% more funds in their superannuation account and were able to withdraw funds at a higher drawdown rate, according to new research.
The study of more than 100,000 Aware Super members looked at the retirement savings and behaviours of those receiving financial advice compared to those who had not.
On average, advised clients were found to have almost $150,000 more in retirement savings.
They were able to withdraw funds at a 33% higher drawdown amount and recorded nearly 2.5x greater voluntary, tax-efficient contributions.
Additionally, advised clients consolidated two times the average amount of super from other accounts that helped them avoid multiple sets of fees and simplify their finances.
The study found the financial advice market is dramatically underserved, said Deanne Stewart, CEO of Aware Super, and there was likely to be growth in single-topic advice.
“We’re expecting to see significant growth in demand for single-topic advice – things like members receiving an inheritance and wanting some tailored personalised advice about what to do with it, but not necessarily being in a position to want or need a more comprehensive conversation about their circumstances at that time,” she elaborated.
“We think this is incredibly fertile ground for innovations in digital advice, for example, where we can see a cohort of thousands of potential clients who all have unique circumstances, but some common advice needs that could be really efficiently served through a digital solution.”
One of the super fund’s key pieces of feedback to the Government’s Quality of Advice Review was the ability to provide such guidance and advice to help more Australians, she added.
She highlighted the value that high-quality financial advice from super funds could deliver for its members.
Stewart said, “Our hope is that through research like that which we’re now undertaking, we can provide meaningful insights to show the benefits of financial advice in helping members achieve better retirement outcomes. From a fund perspective, those insights can also inform the design of affordable and accessible advice, help and guidance solutions to help more Australians.”
The final review was to be provided to the Government by 16 December.
