Show Notes
Ian Yates, Chief Executive of the Council of the Ageing Australia, joins ASIC Deputy Chair Peter Kell on the podcast to discuss preparing financially for retirement. Visit ASIC's MoneySmart website for more information on retirement income planning. Click through for transcript: ----more---- Transcript: Peter: Hello and welcome to the official podcast of the Australian Securities and Investments Commission. My name is Peter Kell and I'm joined this time around by Ian Yates, who is the Chief Executive of the Council of the Ageing Australia and one of the terrific people who we rely on to provide ASIC with insights into the whole area of retirement. Today, we've asked Ian to talk about preparing financially for retirement. Ian, thanks very much for joining us. Ian: It's a pleasure and thank you for having me. Peter: As Chief Executive of COTA, Council of the Ageing, can you tell us Ian what are the main financial issues concerning your members and how does the issue of trust play out in the sector? Ian: Peter, the financial issues facing our members are quite diverse because older Australians are very diverse and some people come off of a period of essentially either retirement or semi-retirement onto an age pension and their primary issues are living on that budget. Others come for the first time in their lives to a retirement perhaps a bit unexpectedly and receive access to superannuation benefits which is a lump sum even though it's still not a mature system, that's larger than they've had ever before, probably even larger than what they've put as a deposit on their house. And then there's what do they do with it? And frequently, that question leads people, if I can say, into making often inappropriate choices. For example, following the global financial crisis, we had a lot of people who without advice capitalised their losses, took their money out and put it in term deposits, and who now regularly tell us that they can't live off the income from their term deposits. So I think it's, actually, one of the biggest issues, is coming into retirement without preparation. And then the third would be people who are subject to, sometimes actual scams, but often just inappropriate products and services, some of which are risky, others of which may be quite genuine products but weren't appropriate to them. Peter: That's a good introduction into the next question, Ian, that I had for you and it's around getting good advice. Because as you've said, there's certainly a degree of complexity out there in the financial situation that confronts older Australians, a complexity in many of the products they're facing, so how can older Australians be confident they are getting good advice? Ian: At one level, Peter, the answer to that is that it's difficult because we are just in the process now of developing a better financial advice system and until we have people who the public generally understands what their training and accreditation is, and means, and indeed until we have that accreditation very properly reflecting specialities. For example, not every financial advisor understands how to advise someone of the complexities of a retirement villages contract, and yet that can have significant financial complications. A relatively simple on paper choice of someone paying for an elderly relative's aged care entry either through a refundable accommodation payment or a daily payment actually can have quite significant financial implications for a family with a whole lot of interconnected financial arrangements. For some people it's straightforward, and for others it's not. So I look forward to a situation where we have a much stronger regulated and trained advisory force, because I think it's really critical. Very few people - we can tell them to do it - but very few people plan many years ahead. So you actually need that advice available at the right time when people are motivated to access it. I think superannuation funds have a
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