As Singaporeans live longer and retire later, financial planning has become increasingly complex—leaving many older adults underprepared for retirement. Seeking professional financial advice is a strategic approach to navigating the growing intricacies of managing savings, investments, and healthcare costs within a rapidly changing socioeconomic landscape. Financial trust is a critical, yet overlooked driver of the advice-seeking behaviour needed to enhance retirement well-being.
The role of trust in seeking financial advice
Financial advice offers significant value in helping Singaporeans achieve retirement security. Research shows that professional financial advice can help maximise returns, reduce uncertainty, and strengthen overall retirement preparedness.
Singaporeans who engage with financial advisory services have been found to have better retirement planning outcomes, including higher savings rates and greater confidence in retirement readiness.
Though rarely considered in policy design, financial trust plays a pivotal role in shaping advice-seeking behaviour. Associate Professor Joelle Fong and Assistant Professor Zeewan Lee from the Lee Kuan Yew School of Public Policy produced an article examining the impact of financial trust on the demand for financial advice in Singapore. They broadly define trust as confidence in banks and stock brokerages, comprising Singapore’s main source of financial advice.
“Financial trust is a strong predictor of consumers’ demand for financial advice,” their research confirms. “Consumers with a higher degree of financial trust are more likely to consult advisors before investing their savings and are also more likely to adopt expert advice.”
As a leading regional and international financial hub, Singaporeans exhibit relatively high trust in financial and other governance institutions compared to many other countries. However, this has not translated into widespread uptake of financial advice. Fong and Lee suggest that cost-related barriers may be a factor.
“One possible reason that Singaporean consumers are not too forthcoming in terms of seeking professional advice despite their high levels of financial trust may be because of the presence of other associated costs of advice-seeking,” their article explains. “Consumers may be disincentivised to seek expert advice if costs—both explicit and implicit—surpass benefits.”
Factors influencing financial trust
Prof Fong and Prof Lee’s research highlights that factors including age, gender, ethnicity, employment, education, income, cognitive ability, and financial literacy influence the demand for financial advice. These factors affect both how individuals perceive the value of advice and their willingness, or ability, to seek it.
For example, the research found that ethnic minorities and lower-income groups are generally less likely to seek advice and tend to trust it less. Likewise, other research demonstrates that those with lower education or income may invest less in financial education and consultation due to the time and costs involved.
Further, although older Singaporeans generally trust insurance agents and bank advisors, they engage less with financial advice compared to younger groups. For instance, another study found that 55% of Singaporean millennials (aged 27-39) had consulted a financial advisor, compared to just 34% of those aged 50-69.
Because older adults tend to hold more wealth and resources than younger generations, managing finances before retirement becomes increasingly complex, making the value of professional advice evident. The growing variety of financial products, coupled with the potential for cognitive decline in later life, further emphasises the importance of early financial planning.
Implications for retirement security and the cost of disengagement
In Singapore, the Central Provident Fund (CPF) serves as the cornerstone of retirement planning. Yet trust in the system, and engagement with professional financial advice, remains critical to achieving retirement security. Older adults who distrust civil servants and bank advisors are more likely to withdraw their CPF savings prematurely and experience negative financial repercussions.
Conversely, many older Singaporeans delay retirement planning due to competing financial priorities and over-reliance on the CPF. Dependence on CPF presents challenges because its capacity to provide adequate retirement income is constrained, in part by policies that allow CPF funds to be withdrawn for housing, thereby reducing the amount saved specifically for retirement.
Although policy and governance changes are underway in response to structural challenges, existing shortfalls can still lead to significant financial strain when unexpected expenses arise. Many retirees are particularly caught off-guard by higher-than-expected expenses related to rising living costs and medical bills, compounding long-term financial stress.
Further, many retirees rely on family support, which places significant pressure on adult children and often falls short of securing older parents’ basic needs. These challenges not only affect individuals but also limit opportunities for intergenerational wealth transfer.
How financial institutions, regulators, and community groups can build trust and empower older adults
Governance changes across Singapore increasingly respond to the evolving socioeconomic dynamics that affect retirement security. For example, the planned increase in retirement age in 2026 extends statutory protections for older employees, allowing them to work longer and boost their savings. Such reforms can strengthen financial resilience and confidence.
However, building trust in financial systems is an overlooked strategy that holds potential to further empower older adults to plan more effectively for retirement. While regulation and structural reforms provide a critical foundation, fostering trust hinges on positive interactions with financial agents. Financial institutions must therefore prioritise transparency, ethical conduct, and client-focused practices that are inclusive of older generations.
Addressing barriers to advice-seeking is also important. As Prof Fong and Prof Lee note, “the willingness to adopt and act on a recommendation from a (third-party) advisor needs to be motivated by a trust relationship with the financial institution/representative, more so than soliciting advice.” They assert that reducing advice costs, clarifying commission structures, and addressing potential conflicts of interest can encourage engagement.
Community financial literacy programs, especially those partnering with trusted intermediaries like the CPF Board or peer educators, can also be helpful to demystify retirement planning and boost confidence. Accessible communication and culturally aware outreach are also critical to the delivery of such programs, particularly to equalise retirement security between ethnic majorities and minorities alike. Regulators, in turn, can strengthen trust by embedding ethical standards and enforcing misconduct penalties.
With thoughtful policy, clear communication, and ethical institutional culture, financial trust can be strengthened across Singapore. As greater trust encourages advice-seeking and informed decision-making, it may serve as a critical lever in empowering older Singaporeans to plan for a more secure retirement.
Prioritising trust within financial policies and services not only empowers seniors to age with greater confidence, independence, and dignity, but also contributes to a more resilient and cohesive society as the population ages.