South Africans are not financially well prepared for retirement, a survey published yesterday revealed.
The Association for Savings and Investment SA (Asisa) conducted the survey at the end of last year among financial advisers active in the areas of personal financial planning, investment and long-term insurance cover.
Asisa said the survey indicated that only 13 percent of responding advisers indicated that 50 percent or more of their clients were well prepared for retirement.
The main reasons mentioned by advisers for clients not saving enough for their retirement were a poor savings culture, not preserving retirement benefits when switching employers, and relying on employers' funds for retirement benefits.
Peter Dempsey, deputy CEO of Asisa, said advisers indicated that the retirement annuity was the most sold retirement product, followed by living annuities, and then preservation funds.
He said on average, two out of every five advisers said they recommended to clients that more than 50 percent of their discretionary money should be allocated to unit trusts.
He added that the research showed that unit trusts sold most often by the respondents were general equity unit trusts and money market unit trusts.
This was followed by asset allocation unit trusts and multi- manager funds.
Least popular were exchange traded funds and wrap funds.
He added that half of the advisers indicated that they reviewed individual client portfolios annually. The rest of the respondents tended to review portfolios more often than once a year.
On offshore diversification, 45 percent of the advisers canvassed said they recommended that between 10 and 25 percent of a client's investments should be held offshore. Some 29 percent said they recommended a five to 10 percent offshore allocation.
Dempsey added that broader diversification and rand depreciation were listed as the main factors that influenced advisers to advise their clients to invest offshore. - Sapa