Have you held conversations with your clients around their retirement funding? Are your clients confident of their retirement plans? This could be an opportunity for you to tap as 56% of Singaporeans are concerned about not having enough funds for their retirement. A recent report shows that too few people are adequately saving and planning for retirement.
This is according to a survey by Blackbox Research and consultancy firm BTO of 1,000 Singaporeans about their retirement funding confidence and how they would intend to finance their silver years.
Here are other highlights of the report:
While the expected average retirement age is 65, 27% of Singaporeans believe they will need to keep working longer and retire after the age of 70. According to the report, increasing life expectancy rate might have played a part in causing Singaporeans to feel the need to retire later, where men are expected to live to about 80 years old and women to 85 years old.
The most pertinent question that should be asked of your clients and prospects with the objection of “don’t mind working past 70”would be, “Are you intending to work past 70 because you choose to? Or because you need too?”
Retirement confidence by age group
The survey data shows the variance in confidence correlated to factors of knowledge, responsibilities, and age.
What is interesting to note is that across the age groups, retirement confidence levels are below 50%, with those in the age 15-24 and age 35-49 below the 30% mark.
So really, there is no “best time” or “when I am ready”. There will be different factors that affect retirement confidence level and which hold us back from embarking on a retirement plan. So if your prospects/clients do not see the value and importance of financial discipline, a “I don’t have money because I just started working” will proceed to “Now I have debts” or “My expenses are so much higher now”.
Willingness to seek financial advice
Shockingly, only 18% of respondents consulted a financial adviser in 2017. It is becoming increasingly necessary for people to take greater personal responsibility for their long-term financial security. Getting insightful knowledge from an expert with proven market strategies can help alleviate the stress of uncertainty that people face when planning for their senior years.
The report says that there is generally a pervasive sentiment of distrust that Singaporeans harbour against financial advisers due to advisers being perceived as too intrusive, hard-selling or lacking any personal touch.
Whether justified or not, it is always important to keep in mind that there are people out there who are of this opinion. Mr Vasu Menon, Senior Investment Strategist, Wealth Management Singapore, OCBC Bank, said: “Financial advisers need to earn trust and not treat their clients as revenue generators. They need to provide holistic advice, taking into account the short and long-term needs of their clients and their risk tolerance, instead of attempting to sell them products in a modular manner.”
Mr Robert Lonsdorfer, Founder & CEO, BetterTradeOff, said: “The report gives insight into how people are clearly not seeking adequate financial advice, nor are they suitably adjusting their retirement plans as their life situation changes, and this prevents them from effectively improving their retirement outlook.”
Going to be harder than you think
While it is important to highlight the need to seek adequate financial advice or to start planning for retirement funding early and to adjust these plans as life situation changes, it should not just be an appeal of logic. As is often said in the industry, logic only opens the mind.
Here’s how to get an emotional response and appeal through my experience to put them in the right frame of mind: I turned 75 - more people should
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