A recent increase in complaints to the Australian Securities and Investments Commission (ASIC) about unsolicited share offers has prompted ASIC to issue a warning to older Australians about the importance of making financial decisions carefully.

Speaking on International Day of Older Persons, Saturday 1 October 2005, ASIC’s Acting Chairman, Professor Berna Collier said older Australians were more likely to be targeted by these offers because many hold shares in demutualised companies.

‘Those making unsolicited offers often target specific groups within the community, including the inexperienced and elderly who are often most at risk of falling victim’, Professor Collier said.

‘This is a timely opportunity to remind older Australians, and those about to retire, how important financial planning and decision-making really is. Retirement can represent a major financial turning point for many Australians’, Professor Collier said.

‘Of course, preparing for retirement involves thinking about your physical health, social networks and lifestyle choices, as well as your finances. But planning ahead is essential to making the most of your money as you get older.’

Professor Collier said ASIC had issued 10 key tips to help older Australians who are thinking about their long-term financial needs or planning for their retirement:

1. Set yourself financial goals and plan a budget that will help you meet them. Your financial situation is likely to be different in retirement to when you’re working.
2. Get involved with your super now – it’s your investment for your retirement. Think about making extra voluntary contributions to boost your super balance if you can afford it.
3. If you’re thinking about a retirement income stream product, do some homework first. For example, find out what options your super fund offers you when you retire. You’ll need to think about which product suits your needs, taking into account tax and social security (including the age pension).
4. You may need to get professional advice about your financial options at retirement. If so, only seek advice from a licensed financial planner – try to choose one who specialises in retirement planning, including the taxation and social security implications of your decisions.
5. For free and independent financial information contact the Financial Information Service (FIS) through Centrelink on 13 23 00 (you do not need to be receiving a benefit to use this service).
6. Shop around for insurance – some insurers will provide cheaper cover (eg on home contents or car insurance) for people in higher age brackets.
7. Take care when considering products that allow you to release the equity in your home, such as ‘reverse mortgages’ or ‘home equity loans’. These are loans and eventually the money must be paid back, with interest. Get independent advice about these products before you decide.
8. Keep up to date with developments in the financial world and how to spot the latest scams, which often target retirees. Subscribe to ASIC’s free monthly electronic newsletter, FIDO news, for regular updates and information.
9. Beware of unsolicited offers to buy your shares. Some shareholders, especially elderly shareholders, have been targeted by unscrupulous operators offering to buy their shares for below-market value, or over very extended payment terms.
10. Be very wary of anyone offering you an investment opportunity that is ‘confidential’, or is said to be a ‘special deal just for you’. These claims are illogical and are often associated with illegal schemes.

ASIC’s consumer website, FIDO, at www.fido.gov.au, has a section for retirees that includes information on relevant money topics, including:

• Budgeting – how to plan and meet your goals, plus tips about investing;
• Superannuation – how to estimate your superannuation balance at retirement using our super calculator, plus information on rolling over funds and accessing your super;
• Retirement income – working out how much money you’ll need when you stop working, plus information about different retirement income products;
• Underinsurance – making sure you have enough cover for the assets you may need to rely on later, such as your home; and
• Reverse mortgages – what you need to think about, and who you should seek advice from, when considering these products.

Check out ASIC’s consumer website at www.fido.gov.au, or call ASIC Infoline on 1300 300 630 for more information.