Challenger launches advice tool as reforms loom

As the 1 July deadline looms, an initiative from Challenger will make it easier for financial advisers to service clients and manage their retirement income needs.

As superannuation reform, including the introduction of Comprehensive Income Products for Retirement, develops in the new financial year, Challenger has launched a range of tools and information resources. This includes a retirement illustrator for advisers to demonstrate how multiple products work together to generate retirement cash flow.

"There is a need for financial advisers and superannuation trustees to be equipped with the tools to support clients and members as we move towards a superannuation system with a greater focus on retirement income streams," Challenger chief executive, distribution, product and marketing Richard Howes said.

Howes noted that no single product can solve all problems, but the combination of a range of products can prove beneficial.

"It's not a binary world where growth assets and income streams are considered separately. Pairing account-based pensions with lifetime annuities can improve financial outcomes in retirement and reduce the risk of retirees outliving their savings," Howes said.

The Retirement Illustrator uses an income layering methodology, dividing income sources into various layers with differing purposes so that guaranteed income sources are used to fund essential needs while income from market-linked investments is used for discretionary spending.

It then uses stochastic modelling to calculate the likelihood of clients realising their retirement goals based on thousands of different market scenarios.

The new campaign will be supported by technical presentations, webinars for advisers and further online tools and resources.

In addition to the new solution, Challenger recently introduced two new lifetime annuity options that balance income needs against access to capital. The first is a flexible income option providing higher regular payments, while the other is an enhanced income option that maximises regular payments.

Read more: ChallengerRetirement IllustratorComprehensive Income Products for RetirementRichard Howes
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