The looming wave of retiring baby boomers is paving the way for the creation of the 'retirement consultant.'
According to a new paper from actuarial consultancy Milliman, the need for the assistance of a consultant focused solely on the implications of drawdown is growing as Australia's $2.1 trillion super system moves away from accumulation.
"They [baby boomers] need growth but are highly sensitive to volatility. They need income but live in a low-inflationary world. They need short-term certainty but have one eye on the long-term," Milliman's Jeff Gebler said.
A retirement consultant is described as holding a blend of skills encompassing actuarial, data science, investment management, behavioural finance and communications, and digital competence.
Gebler, a financial risk management consultant, believes large and important segments of the superannuation market are already in drawdown, citing the 91% drop in net fund flows to the SMSF sector between 2010 and 2014.
"The average SMSF investor has more than $589,000 in super savings while 59% of these one million-plus members are aged 55 or older, according to the ATO. Many of these investors have already left larger super funds in an effort to take more control of their retirement decisions," Gebler said.
"It is partially a reflection of service. Their concerns are often at odds with younger investors still accumulating assets - and accumulating assets has been the dominant focus of the super industry."
Gebler argues that the growing realisation that accumulation is no longer the ultimate goal of super, but rather the appropriate management of those funds is further underscored by incoming legislative reforms and the introduction of Comprehensive Income Products for Retirement (CIPRs).
He believes this shift makes the nature of advice provided must now be more complex, as the purpose of super being to provide income throughout retirement becomes clearer.
"Funds will need to change tack quickly if they are to engage and retain these older members," Gebler says.
"For example, in this new landscape asset consultants will no longer be able to provide all investment advice and may even require re-training to remain in line with funds' new retirement-oriented focus."