Over 50’s reveal their number one financial mistake is not saving enough for their retirement, according to an international survey carried out by one of the world’s largest independent financial advisory organisations.
34 per cent of those polled by the deVere Group cited not putting enough aside for retirement was their biggest financial error.
In the survey – which asked “What is the most impactful financial mistake that you have made?” – The second most frequent response, with 27 per cent, was believing that they could successfully manage their financial affairs without professional advice.
19 per cent claimed it was letting emotions rule over investment decisions; 11 per cent said it was a lack of diversification in their portfolios; 7 per cent said it was not being adequately protected by insurance; and 2 per cent did not know.
A sample of more than 750 clients over the age of 50 were polled in various countries in which the firm operates, including the UK, the U.S., South Africa, Hong Kong, the UAE, Thailand, Indonesia and the Philippines.
Of these findings, deVere Group’s founder and chief executive comments: “It’s with a depressing predictability that this survey concludes that more than a third of the over 50s feel that they have not accumulated enough funds.
“The harsh reality is that unless there’s a seismic cultural shift in attitudes towards savings, many more people will reach the age of retirement and realise that there is just not enough in their pension pots to last throughout their retirement, or enough to enable them to enjoy the retirement they had envisaged.
“Putting money aside for later in life has never been more important. This is because life expectancy is increasing, meaning the funds have to last perhaps two decades longer than even a generation ago; living, care and medical costs will, naturally, all increase over time; interest rates and annuities are at rock bottom; and it is highly improbable that the State will be able to financially support retirees in the future as it has done previously.”
He continues: “This survey also highlights that too many people have previously believed that they could ‘go it alone’ managing their wealth and have committed costly blunders along the way. The most important things in life, including financial security, cannot be left to chance. The best way to safeguard and maximise wealth is to devise, manage and implement a tailor-made plan with a professional.
“The third biggest financial mistake cited by the over 50s was allowing their heart to rule their heads with investments. If your primary aim is to secure the best returns, investment decisions should be rational and dispassionate. Pride and bias can cloud judgement and this is, again, another reason why working with an independent expert is beneficial.”
Mr Green adds: “Another considerable financial obstacle the over 50s have previously made and now flagged up in this poll is a lack of diversification in investment portfolios. History teaches us that risk is reduced through diversification. A properly diversified portfolio should provide exposure to each stage of the economic cycle while avoiding over-commitment.
“Finally, 7 per cent of respondents told us that a lack of insurance has held them back financially when things go wrong which, unfortunately, sometimes they do. One of the cornerstones of personal wealth management is protecting primary assets which, typically, include yourself as a source of income for you and your family, your home and your business. Therefore life, critical illness and business cover, amongst other types of insurance, are essential.”
753 deVere Group clients took part in this survey that was conducted in October 2014.