A new “climate and culture” is needed to solve customer service expectations and close the $600 billion retirement savings shortfall, says Investment and Financial Services Association (IFSA) Chairman Doug McTaggart. Writing in IFSA’s annual report, he says the restoration of consumer confidence in the financial services sector has dominated the association’s thinking over the past year.

Consumer expectations in the midst of disappointing returns is one area that needs attention, he said. “Through investor education we are looking at ways of explaining… why it is imperative that consumers take a long-term view in appraising their investments.”

The savings shortfall identified by IFSA during the year will also lead to a greater concentration on consumer education, Mr McTaggart said. “The retirement savings gap can only be narrowed if the level of voluntary savings increases or compulsory employer super payments are higher.”

CEO Richard Gilbert says the debate over the savings shortfall “has attracted some criticism, but… majority opinion is firmly on the side of those who believe that Australians do not save anywhere enough to support themselves in retirement”.

He said more needs to be done to explain the long-term nature of investment and the risk return trade-off, “including the need to hang in there when markets experience tough times”.