Retirees ‘desperately’ need advice

As interest rates seem destined to remain at historic lows, it is an “exciting” time to be a financial adviser as retirees “desperately” need advice, according to a panel.

Speaking on the Money Management Retirement Income webinar, Sunsuper chief economist, Brian Parker, said no-one could conjure yields out of thin air as interest rates were so low.

“We can’t magically turn 1.5% of risk-free rates into a 5% risk-free rate. Anyone who claims they can is a fool, a charlatan, or both,” Parker said.

“This is an environment where retirees are going to need advice. The next few years are key for advisers to step up and provide the kind of advice retirees desperately need.

VIEW ALL

View all

“The old rules still apply to portfolios: diversification and understanding client’s risk appetite has been and will remain crucial.”

Agreeing, SMSF Association chief executive, John Maroney, said there were examples over the last 12 to 18 months of “outlandish promises” being made about high returns.

“These strategies were widely advertised but weren’t suitable for retirees to be choosing and everyone does need to be careful and that’s an area where a good trusted financial adviser can help a lot,” he said.

“Portfolio construction as well as trying to avoid some of those riskier products being offered at times of low interest rates is very important.”