Alan Kohler’ great rant on the ‘great retirement rort’

Alan Kohler is a highly respected finance journalist. He is Editor in Chief of Business Spectator and Eureka Report, plus host of ABC TV’s Inside Business and their Finance Presenter. He must have been having a bad day yesterday when he unleashed a 960 word scathing criticism of the retirement village sector in his Business Spectator column. (See the full text at the bottom of this newsletter).

The surprise was the extent of the incorrect facts and the emotion he built into the peace. This is how it commenced:

“If the government is looking for a way to redeem itself in the eyes of the nation’s ripped-off retirees after the CBA financial planning fiasco and its pro-bank FoFA amendments, I have just the answer: the scandal that is retirement villages.

And it just got worse.

His performance clearly demonstrates the retirement village sector has not effectively communicated its core value proposition. Kohler, a competent research based journalist, hasn’t got the message. So what about prospective clients, planners and financiers? We have work to do.

Mary Wood, Executive Director of the retirement village council, was quick to respond to Kohler and Business Spectator, stating “The Case for retirement villages – on the half of the 98%”:

“We know that 98 per cent of the residents who live in retirement villages in Australia would strongly disagree with Alan Kohler's views on the retirement village industry, expressed in his Business Spectator column on Wednesday”.

We understand Business Spectator has agreed to carry Mary’s detailed, factual response.

But the damage has been done, and it is significantly greater given its Alan Kohler. Business Spectator has a readership of just 24,746 but his readers do include politicians, the media and perhaps most importantly the professional investor sector. At a time when building confidence with financiers is vital this article will build the perception of risk, not reduce it.

Mary Wood quoted our McCrindle Baynes November 2013 research which surveyed 5,000 village residents across 232 villages nationally. Some quick points that counter Kohler’s article include:

• Just 3% said they were “not satisfied that their expectations of the village had been met”
Just 4% said they “would not move into this village again”
• Just 10% said “moving into the village was not a good financial decision”
Perhaps most importantly, “overall happiness and life satisfaction’ had increased for exactly 50% of residents – a remarkable statistic for people in their mid late 70s and up, most with health challenges. Just 9% suffered a declined having moved into the village.

Mary Wood’s final words: “after all, Mr Kohler, 98% of village residents can’t be wrong”.