Retail investors seek super alternatives
More and more retail investors are opting for different investment avenues to supplement their superannuation and diversify their portfolio, Industry Fund Services (IFS) said.
The industry super fund-owned financial products and services provider said historic low interest rates, increasing life expectancy and apprehensions about savings adequacy were leading retail investors to diversify.
IFS chief executive, Bill Danaher, said low interest rates were not helping those looking to build their savings through traditional cash-based investments like term deposits and savings accounts.
"Australians are expected to live longer than ever before and are increasingly aware that they may need to look beyond the income that their current compulsory super account will provide," Danaher said.
He added that compared to 20 years ago when retail investors only had options like investment property, some shares or managed fund, today's investors are more sophisticated and are looking for exposure to those asset classes that match their risk profile.
More than half (52 per cent) of IFS clients are aged 40-65, and many who are diversifying may be doing so because they have reached the concessional contributions cap on their super and cannot make tax-effective contributions.
The comments follow Centuria Life general manager Neil Rogan's statement that changes to super taxes can lead members to flee and seek shelter in investments outside of super.
AUTHOR
Malavika Santhebennur
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