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
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.