July 18, 2017
July 18, 2017 | Risk Pulse
The new ‘typical’ Aussie, household debt skyrockets, and how to catch a Millennial
The 2016 Census results were recently released and painted a very interesting picture of modern Australia. And while many of us won’t easily forget the #censusfail, which saw a huge drop in the number of respondents this time around – as well as some reportedly dubious information from some of those who did – there are still some important things we can learn from the 2016 results.
We now have a clearer picture of the ‘typical’ Australian.
She’s a 38 year-old ‘Gen X-er’, who can expect to live past the age of 85. She’s married with two children, works full-time, and lives in one of Australia’s capital cities (as 3 in 5 of us now do). And her home, according to the ABS, is worth around $825,980. It is owned with a mortgage, with $427,847 equity, and forms the majority of her wealth.
Putting aside the point about lies, damn lies and statistics, we can learn a lot from this ‘typical’ Aussie – particularly what her lifestyle indicates about future trends and opportunities for financial advisers.
Australia has an ageing population. And while we are living longer (now upwards of 85 years on average) it also means there is a real ‘longevity risk’ for Australians in the future, that is, they will outlive their retirement savings.
The government have tried to help alleviate this stress in recent years by tinkering around the edges of superannuation however tackling the retirement income issue for rapidly ageing Australians will require much more long-term, innovative thinking. This is a big focus for Zurich globally, and also something that we have been mindful of when considering our retirement income offering at a local level.
For advisers, the recent census data also highlights the importance of having a robust intergenerational advice strategy in place. It is estimated that the intergenerational transfer of wealth to Gen X and Y over the next 30 years will be $2.4 trillion, with more than $400 billion of housing stock changing hands in Australia over the next 10 years alone.
With the typical Australian now a member of Generation X, with significant financial commitments of their own, the challenge and opportunity for advisers lies in capturing this next generation. We explore this issue in more detail in this edition of Risk Pulse, with the first part of our series, Intergenerational Advice Part 1: the opportunity worth chasing.
On a related note, we also take look at the historically high levels of household debt in Australia, asking advisers to consider whether now is the time to review their clients’ level of protection, and explain why Corporate Social Responsibility is the new ‘must have’ for businesses to help attract and retain the up and coming cohort of Gen Y and Millennial clients and employees.