Why Australians are at risk of scams due to informal retirement advice

Older Australians were more likely to seek advice from formal sources.

Only over half of Australians and 60% of those aged 65 years and above thought about retirement planning, research by the Association of Superannuation Funds of Australia (ASFA) revealed.

ASFA CEO Mary Delahunty expressed concern over these findings, stating that many Australians may face financial difficulties in retirement due to a lack of relevant guidance. 

She emphasised the need for reform to provide affordable and accessible financial advice through superannuation funds.

ASFA’s survey, which covered a representative sample of the population, showed that 21% of respondents had consulted professional services like financial advisors, whilst the same percentage turned to friends and family for advice. 

Online calculators were used by 15%, whilst only 12% sought advice from super fund advisors. Media articles and social media were consulted by 8% and 6% of respondents, respectively.

Older Australians were more likely to seek advice from formal sources, such as professional advisors and super funds, whilst younger individuals relied more on informal sources, including friends, family, and social media. 

Notably, those aged 18 to 34 were 15x more likely than those over 65 to rely on social media for retirement advice, leaving them more vulnerable to superannuation-related scams.

Despite a high level of trust in financial advisors and super fund advice, usage of these services remains low, primarily due to cost barriers. 

Delahunty noted that whilst financial advisors are trusted, their services are often too expensive for average working Australians, the very people who would benefit most from such advice.

ASFA is advocating for reforms in the retirement income sector to improve access to affordable, quality financial advice through super funds. These reforms, which aim to reduce regulatory hurdles and increase efficiency, are seen as vital for ensuring Australians' financial well-being in retirement.