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Michael Sill
Michael Sill, Mentor Education

Intergenerational Report shows financial advice need

9 March 2015
 Joe Hockey
Joe Hockey

The federal government’s recently released Intergenerational
Report (IGR) has highlighted the need for financial advice.

With a projected number of Australians aged 65 and over
expected to double by 2055, The Intergenerational Report,
released by Treasurer Joe Hockey, called attention to the
importance for consumers; in particular the aged to seek
financial advice.

With male life expectancy projected to increase from 91.5 in 2015 to 95.1 in 2055, and female life expectancy set to increase from 93.6 to 96.6 in 40 years’ time, the already booming advice sector will play a major role.

In addition, the report concluded that by 2055 there will be only 2.7 working Australians to support every Australian over 65, compared with 4.5 today and 7.3 in 1974/1975. Furthermore, those living over 100 will increase to 40,000 by that time, which highlights the significance of ensuring that a sustainable retirement income over longer periods is attained.

Mark Rantall, the FPA chief executive said that the Intergenerational Report, “makes it very clear that there is a link between superannuation savings and reliance on the age pension.” Rantall believes that with less people relying on the age pension, the importance of financial advice becomes evident.

Rantall says if Australians seek proper financial advice from an early age and use it to
maximise their superannuation so they can reduce reliance on the age pension, the
“nation as a whole will be infinitely better off.”

With Investment Trends research indicating that only 2.5 million Australians currently use a
financial adviser, Rantall believes this figure will grow substantially and with people’s appetite for seeking advice showing and increase of 33% in 2014 to 1.9 million, “the role financial
planners play is pivotal.”

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