SSgA targets retirement lifestyle


State Street Global Advisers (SSgA) has leveraged feedback from financial advisers, researchers and super fund trustees to launch new retirement lifestyle products into the Australian market.
The company, which is the asset management business of State Street Corporation, signalled that it was intent on moving beyond the old balanced fund approach, which sat at the core of traditional investment approaches.
Commenting on the move, SSgA Investment Solutions group chief investment officer Dan Farley said the company had undertaken a lot of conversations with portfolio construction professionals when designing the funds.
"The feedback we received was consistent. These professionals want solutions that support investor engagement, that acknowledge investors' behaviour and lifestyle aspirations change during different stages of life and market cycles, that explicitly manage risk and return, and that are cost effective," he said.
"One thing we repeatedly heard was that people feel the old balanced fund approach, born 20 years ago at the establishment of superannuation, is no longer the right one for all retirement investing.
"How retail investors experience risk and return in the lead up to and the actual retirement phase is very different to how institutional investors assess it. Retail investors are mostly interested in total return, the volatility of returns and the possibility of losing their capital. Benchmarks and tracking error are not as important to retail investors."
Farley said the SSgA Retirement Lifestyle Solutions series was designed to address the retirement conundrum facing investors by providing meaningful levels of real income while mitigating the effect of short-term volatility.
The company's announcement said the SSgA Retirement Lifestyle Solutions series comprises three cost-effective strategies targeting distinct periods in an investor's life:
- SSgA Retirement Lifestyle Builder for the working years in the lead-up to retirement and targeting capital growth of CPI +5 per cent;
- SSgA Retirement Lifestyle Sustainer for investors in active retirement and targeting capital growth of CPI+ and a consistent income target of RBA cash+;
- SSgA Retirement Lifestyle Provider for the years after the age of 80 and targeting a consistent income of RBA cash +2-3per cent.
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.