One of the most important issues facing the Australian pensions industry is the need to get younger people interested in saving, according to Democrats Senator Andrew Murray.
"The best guarantor of the security and sustainability of Australian retirement is to engage people younger", the West Australian senator said. His comments were addressed to REST chief Damian Hill at Tuesday's public inquiry into the structure of superannuation.
The vast majority of REST members are under the age of 35 and have an average account balance of just $3,500.Murray asked Hill whether it was likely "we'll ever be able to agitate interest in that demographic for their future". In reality those under the age of 35 worry more about the present than their future", Murray said.
Hill agreed REST struggled to engage with its younger members, but said it was still very important to try and educate them. "Our members have frugal means or meagre account balances and a little bit of advice at an early stage can be a huge benefit to our members over time", he said. He added, however, that it was difficult to start tailoring advice to particular demographics because it would be construed as personal advice under the current laws, which was beyond REST's licence.
Most industry funds agree the boundaries between general and personal advice are ill-defined by current law and limit their ability to help members. "Our experience shows that over 92 per cent of members who receive single-issue superannuation advice and do not wish to go to a full financial plan and consequently would go unserviced by the traditional financial planning industry", REST's submission to the inquiry said.
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