The findings come from Skandia International’s latest Adviser Confidence Barometer Research which surveyed more than 440 advisers from Hong Kong, Singapore, Dubai, UK, Europe, Africa and Latin America.
Skandia found the largest funding gap was noted by advisers based in Singapore who believe 65% of their clients have a gap between how much they are saving and what they will require during retirement. Meanwhile, respondents from Latin America, where there is a strong savings culture, reported the lowest proportion of clients with a retirement savings gap at just under half, although Skandia said this is still “worryingly high”.
The report also found, while the number of clients with a retirement funding gap is high, two thirds of the advisers questioned believe their customers can afford to save for retirement but are not doing so because of other factors.
A quarter of the respondents believe their clients have left savings too late in life, while over a fifth (21.7%) of advisers feel their clients do not have a clear picture of how much they need to save now in order to fund their retirement.
Skandia’s survey also found, due to the current economic climate, 44% of advisers believe their clients have become increasingly risk averse over the last three months so it follows that almost half (44%) of respondents said demand for investment products from their customers had decreased.
“The retirement funding gap is a worrying development,” said Phil Oxenham, marketing manager at Skandia International. “It appears most clients are able to save but are unaware of just how much money they need to save now to fund their retirement later on.
“As a result, customers postpone saving altogether – and the delay will have a significant impact on the amount they would be able to accrue for retirement. This, coupled with the continued drop in investor confidence and the fall in investment levels, signals a real and urgent need for financial advice to help clients develop a better understanding of the long term nature of investment.”
