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.
 

Happy reading

Kris 

July 18, 2017

Intergenerational Advice Part 1: the opportunity worth chasing

Like most developed countries, Australia is facing the challenge of an ageing population. It is estimated that by 2020 there will be more 65 year olds than one year olds in Australia, leading to a complete inversion of the “population pyramid”.

July 18, 2017

Household debt reaches the highest highs: are your clients covered?

The decision by the Reserve Bank to leave the cash rate on hold for the eleventh month in a row has surprised few. Even more unsurprising may be the news that Australians’ level of household debt has reached historical highs, at 190% of disposable income.

July 18, 2017

The business case for corporate social responsibility

There is a clear link between an organisation's environmental and social impacts, ethical practices and quality of its corporate governance and its long-term business success. And while corporate social responsibility (CSR) is typically associated with large companies, rather than small businesses, as the need to attract and retain the up and coming cohort of Gen Y and Millennials intensifies, companies of all sizes are quickly learning that social responsibility has become a contemporary advice business imperative.

July 18, 2017

Important updates to our Trauma definitions

We are proud of our excellent reputation at Zurich in providing the highest standards of service to our valued advisers and their customers, and are committed to our goal to become Australia’s most trusted life insurer.