While advisers may think they have a lot to be depressed about, what with difficult operating conditions because of tough economic environment and continuing regulatory changes, they shouldn’t lose sight of the fact that there are a number of positives that will make 2012 a good year for business, according to Equity Trustees Limited (EQT) head of wealth management Mr Phil Galagher.
“To begin with, there will be around 255,000 baby boomers reaching retirement age in 2012, and many will have access to more money than they have ever had before and who, because of the increasingly complex rules regarding superannuation and savings, will need financial advice.
”Coupled with increased longevity, and the changing needs of elderly retirees, we have an environment of increasing numbers of potential clients, and more clients who will need advice for longer.
“After a long period of regulatory uncertainty about financial planning, and continuing criticism of planners brought about by the changes being discussed, things should settle down in 2012 with planners having a better understanding of the regulatory regime affecting them.
“At the same time, we will also almost certainly see changes to personal taxation and adjustments to super rules continue, meaning more uncertainty for savers and investors, and a greater need for advice.
“Advice for new retirees is clearly going to be a growing area of specialty for advisers with the baby boomer retirement bubble expected to continue for some time.
“The Australian Bureau of Statistics figures show that an increasing number of babyboomers will turn 65 every year for the next seventeen years, culminating in 312,000 Australians who will reach retirement age in 2028.
“This will be a huge opportunity for advisers who are able to promote their skills to this expanding market.
“Many of these new retirees will need advice from skilled financial planners if they are to take full advantage of all the opportunities available to maximise their retirement income.
“There is no doubt that people getting advice will do better, and have better pension arrangements, than those without an adviser.”
Mr Galagher says that the tax effect of the complex superannuation and pension rules can be hugely significant for retirees, particularly for any who currently have most of their income-producing savings outside superannuation.
“When they retire, many people look at their total wealth represented by their super and in other savings that they have, and have no idea of what they can, or should, do to give themselves the best retirement income.
“Advisers who get over the new regulatory requirements affecting the sector quickly, accept the inevitable, and develop new practices so that they can focus confidently on business development will ultimately get most satisfaction and income from their business.
“Hopefully government will now recognise the impact that good financial advice can have on the ability of people to fund their own retirement, and the benefits that this brings to the federal budget in reducing the rising demand on government funded aged pensions.
“With the number of baby boomer retirees increasing, the cost of government funded aged pensions will also rise significantly.
“Now the government has finalised its reforms it should, in its own self interest, support the benefits of good financial advice to help increase the number of self-funded retirees,” Mr Galagher said.
About Equity Trustees: Equity Trustees is a publicly listed company that provides a range of financial services to corporate and private clients. Its businesses include private client wealth management, funds management, responsible entity appointments, and corporate and personal superannuation.
The company manages over $4 billion in its funds management, private client and superannuation businesses and has more than $19 billion under responsible entity administration. Equity Trustees employs over 180 people in its Melbourne, Sydney and Brisbane offices.
For more information please contact Phil Galagher – 03 8623 5221
1 December 2011