Aussie employers understand importance of advice

Most Australian employers understand access to financial advice through default super is important to their employees, latest research shows.

State Street Global Advisors 2019 Global Retirement Reality Report (GR3) reveals 61% of Australian employers think employees and members consider it important to be able to access financial advice through their superannuation fund.

However, around 7% of employers believe employees don't consider access to advice as important.

What's more, the 61% proportion of Aussie employers who do, sit well below their global counterparts. In the Netherlands that number is 71%, while in the UK, US and Ireland, 78%, 81% and 83% of employers respectively agree access to retirement planning advice is important.

The report shows that when it comes to selecting a default super fund, Aussie employers consider ease of use and understanding (37%) as a higher priority than the range of investment options available (14%) or the fees charged to members (22%).

The results are broadly in line with global figures; with an appropriate range of investment options (18%) considered more important than fees charged (17%) for the international cohort of employers.

SSGA head of investments Australia, Jonathan Shead said that with the battle for employer default fund status continuing in Australia, considerations such as environmental, social and governance investment options would start to become more important to employers.

"We believe that funds with a clear ESG proposition for both employers and prospective members will start with an advantage over their competitor," Shead said.

He added that typically Australian themes - like access to advice and ESG options - weren't occurring in a "domestic vacuum" and were impacting the rest of the world just as much as Australia.

"A number of the broad themes that have emerged in Australia are truly global in scope. As world pension systems increasingly move toward defined contribution designs, themes like system complexity, the role of financial advice and ESG are coming to the fore," he said.

He added that by considering access to advice important to employees, employers had a good opportunity to help form good savings behaviours early.

"Our 2018 GR3 survey shows Australian retirees' top advice to today's savers is to engage pension planning earlier (71% of respondents), followed by saving earlier (69% of respondents)," Shead said.

"Advice allows savers' to forge their own paths, and the sooner they begin upon the journey, the more rewarding the experience. Employers have the opportunity to guide them to the start."

Read more: AdviceESGGR3Jonathan SheadGlobal Retirement Reality ReportState Street Global AdvisorsSSGA
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