Research confirms investment settings


|
New research released by Australia’s largest superannuation fund, AustralianSuper, has confirmed previous findings that reducing investment risk exposure could be a mistake for Australians when they retire.
AustralianSuper chief executive Ian Silk said the research involved comparing the risks and benefits of the fund’s current default investment option against several other options and default models such as aged-based and target date pensions.
“One of the key findings of the review was that it [could] be detrimental for members to reduce their investment risk once they retire,” he said.
Silk said that as a result of the research, AustralianSuper had not only retained the balanced option as AustralianSuper’s default investment option for accumulation members, it had introduced an age-based default for its pension product.
He said the concept of “retirement income” as distinct from “retirement balance” had been central to the fund’s analysis.
Silk said that given most members’ long investment horizons, which increasingly continued beyond retirement, the review highlighted that it was important to invest with the objective of proving the highest possible retirement income for the longest possible period, rather than simply maximising the account balance at retirement.
Recommended for you
Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions in the final quarter having a positive effect for two licensees.
A $3.5 million settlement for victims of Melissa Caddick has been approved by the Federal Court following an initial agreement last December.
The Reserve Bank of Australia has delivered its first rate decision since the introduction of a new board structure last month.
Digital advice provider Otivo has launched an interactive tool, powered by artificial intelligence and Otivo’s own advice engine, to help answer client questions.