Media Relase - National Calls on Banks to Help Close Retirement Savings Gap - 9 March 2005

The financial services industry has to do more to close Australia's "retirement savings gap", according to Ahmed Fahour, National Australia Bank's CEO Australia.

Speaking at the Melbourne Financial Services Symposium today, Mr Fahour said banks need to step up to the challenge and be part of the wealth creation chain.

"Our population is getting older and the level of savings in the short-term is insufficient," Mr Fahour said.

"The complexity of taxation arrangements, the myriad of product offers and the amount of recent change in the financial planning industry all contribute to a level of confusion around savings. 

"We have to overcome the uniquely Australian 'she'll be right mate' attitude when faced with savings and investment choices.  In truth - it may not.

"Australians' lack of interest in saving for retirement is matched by an unwillingness to protect the investments they make.

"Changing this scenario requires continued focus from the government on the value of financial advice and a better understanding of customer concerns by the industry to ensure continual improvement.

"To date, banks have struggled to seamlessly connect basic banking products and more sophisticated financial tools," Mr Fahour said.

Integration of the National's banking operation and  the MLC wealth management business is well under way, under Mr Fahour's leadership.

"At the National, we are re-engineering processes, reducing complexity and making it easier for customers to do business with us and to help our staff deliver truly integrated financial services," he said.

"Our branch network is the envy of most other financial institutions and we will be refocusing on branches as a point of contact for financial planning advice.

"Our aim at the National is to rebuild a level of trust with our customers.  We will give them a level of confidence that they can come to our branches and that we can deal with their more complex financial needs."

Mr Fahour referred to important government initiatives including the 50 per cent increase in co-contribution measures for lower income earners. He applauded the 33% reduction in superannuation surcharge over the last four years adding that it, if removed outright, would create an enormous savings vehicle.

Mr Fahour also said the introduction of Superannuation Choice legislation will directly encourage Australians to take a more active interest in their retirement income. 

"Compulsory superannuation, when it was introduced, was a bold step and has given Australia a unique place in the funds management world," Mr Fahour said. "But it will not alone deliver the lifestyle that we all look forward to in retirement.

"Choice is probably the biggest single trigger event that will lead to people needing advice so far. Choice is good: Choice with quality advice is fantastic."
 
For further information, please contact:

Stacey Mitchell 
Corporate Affairs 
National Australia Bank  
Tel:  02 9966 3035   
Mob: 0400 305 446   

Geoff Lynch
Corporate Affairs
National Australia Bank
Tel:  03 8634 1564
Mob: 0405 319 819