Opportunities abound for advisers in next wave of retirees
A “wave of grey” is creating opportunities for financial advisers as the number of Australians expected to retire in the next five years increases to 500,000, according to Challenger.
Retirement was being discussed by all parts of the industry more than ever before, the firm said, as there was a growing awareness of how the needs of retirees differed from those in the accumulation stage.
According to the Australian Bureau of Statistics (ABS), some 50,000 people were expected to retire in the next five years and 3.9 million people were already retired.
Luke Cheetham, general manager for retail distribution at Challenger, said: “There is wave of grey coming over the mountain and there is an opportunity for advisers to support those entering retirement, it is enormous. All the research shows that those people who have an adviser feel more prepared and confident about their retirement plan”.
Referencing the Retirement Income Covenant (RIC), which would come into force on 1 July, 2022, he said it was unlikely the industry would see an immediate change and it would be more of a gradual transition.
“We see the RIC as a really important measure to raise awareness of the importance of retirement and we don’t necessarily see it as a Big Bang. You won’t go to bed on 30 June and wake up on 1 July operating very differently.
“We expect as the system matures, we’ll begin to see best practice emerge across certain member cohorts and certain member demographics which will drive innovation. It’ll shape product design, modelling, the development of tools and calculators that will ultimately influence the advice experience.”
He said the RIC would also help people to understand the risks they faced in retirement and ensure they capitalised on opportunities available to them.
Challenger had launched a range of market-linked lifetime annuities which Cheetham said had been popular with advisers as they offered clients flexibility to adapt to their changing circumstances.
“Australians are living longer than ever so the ability to adjust the risk profile as they age is a real innovation.
“We will continue to innovate over the coming years and we want to do that in conjunction with advisers because they are at the coalface and they can tell us where the opportunities and the gaps are so we can provide with the solutions they need.”
AUTHOR
Laura Dew
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