The study shows considerable room for improvement in how super funds and pension schemes communicate ESG detail to members.

Overall confidence in being able to retire has significantly risen in Australia, according to the 2024 MFS Global Retirement Survey. However, 75% of superannuation fund members agreed they needed to save more than planned.

More than 700 Australian retirement plan members and, for the first time, over 300 retirees were interviewed as part of the global study spanning similar cohorts in Canada, the United States and the United Kingdom to gauge pre- and post-retirement sentiment.

Australians more confident about retiring, but not at the age they want

One in two Australians contributing to their super said saving enough money for retirement was a major financial concern and was a factor that led one in four to change their retirement investments over the past 12 months.

However, the survey found that the number of Australians who no longer expect to retire significantly dropped, from 40% in 2023 to 28%. This shows a marked improvement in retirement confidence, but only 23% were very sure they’d be able to retire at the age they wanted, down from 26% in 2023.

Looking ahead 12 months, 49% of Australians said managing day-to-day financial obligations was their top concern, far more so than their global peers, which affirms that costs of living in Australia are being felt acutely, heading into 2025. 

Retirement expectations and reality gaps

Confidence was higher among retirees drawing down on their super, with 38% very confident that their saved assets would provide sufficient cash flow through retirement. Predictability of payments continued to rank as the most important retirement portfolio priority, in line with global peers, yet the study found that 59% of local retirees spent less in retirement than they did during their working years.

While the Australian Government has recently announced a raft of measures aimed to improve the quality, affordability and access of advice, including within the superannuation segment, initial movements among superannuation funds to provide limited advice appear well received. 55% of all super contributors relied on information supplied by their super funds to make retirement decisions, followed by financial media (31%), a family member (30%) and a financial advisor (29%). Australian Millennials are most likely to turn to their super fund for advice, as well as use financial media. Almost one in five local Gen Xers said they don’t use any resources for financial advice.

Misconceptions passive versus active investing

The study affirmed that 51% of Australian contributing members believe long-term for retirement investing means 10+ years but revealed some stunning misconceptions around risks of passive investing. 65% of Australians agreed that actively managed funds can choose stocks and bonds that may generate better returns than the overall market, but 61% of Australians surveyed said passive funds are less risky than the overall market, and 29% said passive funds usually have better returns than the overall market.

 ESG sentiment falls for third consecutive year

 73% of Australians were interested in seeing more ESG investments offered in their retirement plans, with most conviction coming from Millennials (78%). 2024, however, marks the third consecutive year of falling overall ESG sentiment. Australia’s Gen Z were only marginally more interested (75%) than their older Gen X peers (71%). Boomers remained least interested (62%).

The study also shows considerable room for improvement in how super funds and pension schemes communicate ESG detail to members. Half of Australian respondents said they didn’t know if their plan was doing an adequate job of considering ESG issues when making investment decisions on their behalf.

Josh Barton, Managing Director and Head of Australia and New Zealand, commented on the findings:  ‘It is concerning to see in our survey results how few Australians rely on financial advice to manage their financial affairs.  Whilst it is encouraging to see the government trying to address this blind spot and enable more advice to be provided within superannuation, there is clearly much work to do, and clarification needed. Meanwhile, critical understanding gaps are likely to persist, such as those discovered by our survey in relation to the risk and performance misnomers associated with passive investing. While more retirement plans appear to be within reach, advice remains key to achieving it, even more so today given investment markets have become increasingly complex and difficult to navigate.

The post MFS Global Retirement Survey shows Australians more confident about retiring but expect to save more than planned appeared first on AdviserVoice.

Negin brings 15 years of industry experience in investment management client relations and business development. She joins MFS from Capital Group where she was Director, Financial Intermediaries, having held senior business development and client relations roles over nine years with the firm. Before that, she worked at Deutsche Bank, where she played a key role in building its dbSelect platform across Asia. 

Based in Sydney, Negin will be responsible for fostering awareness of MFS’ broad range of fixed income and equity solutions and promoting the adoption of those solutions by institutional investors. She will work alongside Harry Green, who joined MFS in November from Frontier Advisers as a Relationship Director.

While consolidating MFS’ strong equity market position, Harry and Negin will collaborate with local and global relationship management teams, focusing on the firm’s suite of fixed income strategies, lesser-known contrarian value and global REITs, and listed infrastructure strategies. Both will report to Josh Barton, Managing Director and Head Of Australia And New Zealand. 

Commenting on Negin’s appointment, Josh said, ‘Negin’s exceptional experience, and her passion for understanding and anticipating client needs, is well aligned with MFS’ client-centric approach and complements our dedicated and diverse team of relationship managers. We’re delighted to have her join us.

‘Australia’s investment sector is delivering robust capital returns that are durable, risk-managed and aligned with desired outcomes and values. This is a complex and challenging task that requires partners who share and demonstrate a sense of stewardship.’

Commenting on her appointment, Negin said, ‘MFS is globally renowned for its deep and long-term relationships with investors. I’m excited to be part of a great team dedicated to supporting Australia’s world-leading institutional investment community.’

MFS has a long track record of working with clients in Australia and New Zealand and services approximately AU$29 billion of client assets. It has AU$919.7 billion of global assets under management as of 31 January 2024.

The post MFS Investment Management bolsters Australian institutional sales team appeared first on AdviserVoice.