Industry needs better retirement advice blueprint: ExpertBY KARREN VERGARA | THURSDAY, 30 NOV 2023 12:53PMLongevity risk, a greying population, and the proliferation of retirement income products are forcing financial advisers to be better equipped in navigating a landscape that is becoming increasingly more complex, an industry expert says. Optimum Pensions head of engagement Stephen Huppert told Financial Standard that it's time for the advice industry to knuckle down on how they can help clients achieve better outcomes in retirement by incorporating newer and appropriate products in their recommendations. "Planning for retirement is complicated and with new products being launched, [navigating the retirement phase] is becoming more complicated. There are about half a dozen new individual retirement products on the market. How advisers can best help clients understand and use them is the question we are trying to address," he said. Talking to Optimum Pensions' newly released guidebook for advisers - Retirement income for life: Solving the longevity equation - Huppert said this aims to help them address a myriad of factors that are preventing them from advising on retirement products with confidence. The book also provides case studies and insights and solutions for balancing clients' retirement lifestyle expectations with strategies and options available in the market. One of the main drivers behind the low take up of annuities in Australia is that they are not available on Approved Products List (APLs) - which limits advisers on what they can recommend to clients. "APLs are very powerful. Various product providers are currently working with agencies to get them rated," he said. Retirement income products provided by AMP and Generation Life, for example, are only available through financial advisers and so "being on an APL is critical." It is also important to note, Huppert said, that the newer retirement income products on the market are different from the traditional ones. "We want to make sure that when advisers hear the word "annuity" that there is a new generation available and that they understand the differences. We now have new products such as investment-linked annuities and market-linked annuities that have different characteristics to the old traditional annuities, which we believe are more attractive," he said. Recently released figures from the Australian Bureau of Statistics (ABS) shows there were 4.1 million retirees in 2020-21 comprising about 16% of the total population. At the time, some 670,000 planned to retire over the next five years. "That's a massive number. Who will help them? They'll either go to their super funds or financial advisers. So, financial advisers need to be equipped to provide that guidance and advice," Huppert said. Related News |
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