Time for adviser action on financial literacy

Financial planners should not rely on the Government to raise the financial literacy of the Australian public, but should take action themselves by going into schools in advisory groups to teach children about how to manage money, according to the senior adviser at Novus Capital, Sara Harman.

Speaking at the FINSIA consumer finance symposium in Melbourne, Harman said that the way to solve longevity issues in retirement and a lack of education about retirement products was to educate people at an early age about the problems – and it was up to financial planners to take that step.

“Really, if I had my way, we would be going into the schools as advisory groups, or mentors, and going back to the basics. That would probably conquer some of the fear issues that we current see, where people have either left their retirement run too late, and people facing retirement who don’t understand the products,” she said.

Harman said retirement products couldn’t “be everything to all kinds of scenarios”, so selling the products wasn’t the problem, it was educating the public about which products were best for each scenario.

Harman also called on the Government the relax some of the rules around drawing money from their super pre-retirement.

“People come into retirement and the costs of it have increased just like a litre of milk.

“The reality of it is that many people coming into retirement have got many more blisters on their life than they did many years ago. They’ve got their children’s children, they’ve got multiple divorces, maybe illness, why not give them some access to some of their undeserved moneys to pay off some of the mortgage?

“If my money is still tied up, I’m still in the same strife approaching retirement – I need that money released,” she said.