Invest
Spike in take-up of annuities
Rollercoaster markets and record-low cash rates are seeing retirees being increasingly exposed to annuities and outcome-based funds, according to new research.
Spike in take-up of annuities
Rollercoaster markets and record-low cash rates are seeing retirees being increasingly exposed to annuities and outcome-based funds, according to new research.
The Investment Trends 2015 Retirement Planner Report, based on a survey of 591 financial planners, indicated that in the 12 months to October 2015, financial advisers placed only 16 per cent of their new retiree client flows into cash and term deposits, which was down from 22 per cent in the previous year.
Recep III Peker, Investment Trends' head of research for wealth management, said that in order to add value for pre-retiree and retiree clients, especially in this high-volatility and low-interest rate environment, financial planners are reducing their flows into safe haven investments such as cash and term deposits “in favour of more sophisticated products”.
“Annuities, diversified funds and income funds will continue to be the winners as planners seek higher yielding, diversified investments.”
Annuities and outcome-based funds in particular will see increased usage, according to Mr Peker.
The number of planners who advise on annuities, based on the survey, has increased from 32 per cent in the 2013 survey, to 41 per cent in 2015.
Mr Peker credits Challenger for the product's growth in popularity.
“Planners are becoming proficient in recommending annuities, with more finding them easy to understand and use,” he said.
“Client awareness of the Challenger Annuities brand has also contributed significantly to planners’ ability to recommend annuities, helping to grow the market”.
The survey also showed that 84 per cent of planners are seeking assistance from product providers to better service their pre-retiree clients.
According to Investment Trends, advisers are commonly looking for online tools and calculators ahead of education and awareness initiatives.
“Planners want product providers to equip them with the necessary tools to engage their pre-retiree and retiree clients,” said Peker.
“Having the right products is important, but these need to be backed with interactive tools and calculators that planners can use alongside their clients.”
RELATED ARTICLES
Property
Young buyers poised for a comeback as 5% First Home Guarantee takes effect
In a move set to reshape the Australian property landscape, the government’s revamped First Home Guarantee is poised to open the doors of homeownership to a new generation of young AustraliansRead more
Property
AFG Securities waives settlement fees for first-home buyers, signalling strategic shift
In a strategic move aimed at easing the financial burden on first-home buyers, AFG Securities has announced the elimination of settlement fees on select loans, potentially saving customers up to $699Read more
Property
From trust woes to wealth: Australian agencies' secret to boosting prices
In Australia’s residential market, trust is no longer a nice-to-have—it’s a pricing variable. Persistent distrust of real estate agents is depressing vendor outcomes and inviting regulatory heat, but ...Read more
Property
Reality check for first home buyers: Affordable suburbs with 5% deposit
In a significant development for Australian first home buyers, a new property search tool from Aussie Home Loans is set to transform the way prospective homeowners approach the market. As the Federal ...Read more
Property
Trust as a performance multiplier in Australia's real estate market
In Australia’s A$10–11 trillion housing market, trust is emerging as a crucial factor that sellers and agencies can no longer afford to overlook. Traditionally viewed as a soft metric, trust is now ...Read more
Property
LJ Hooker Lake Macquarie makes a splash with Belmont buy as real estate consolidation looms
LJ Hooker Lake Macquarie’s acquisition of the Belmont office, including its rent roll, is less about shopfronts and more about balance‑sheet resilience. In a market where listings ebb and flow with ...Read more
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Young buyers poised for a comeback as 5% First Home Guarantee takes effect
In a move set to reshape the Australian property landscape, the government’s revamped First Home Guarantee is poised to open the doors of homeownership to a new generation of young AustraliansRead more
Property
AFG Securities waives settlement fees for first-home buyers, signalling strategic shift
In a strategic move aimed at easing the financial burden on first-home buyers, AFG Securities has announced the elimination of settlement fees on select loans, potentially saving customers up to $699Read more
Property
From trust woes to wealth: Australian agencies' secret to boosting prices
In Australia’s residential market, trust is no longer a nice-to-have—it’s a pricing variable. Persistent distrust of real estate agents is depressing vendor outcomes and inviting regulatory heat, but ...Read more
Property
Reality check for first home buyers: Affordable suburbs with 5% deposit
In a significant development for Australian first home buyers, a new property search tool from Aussie Home Loans is set to transform the way prospective homeowners approach the market. As the Federal ...Read more
Property
Trust as a performance multiplier in Australia's real estate market
In Australia’s A$10–11 trillion housing market, trust is emerging as a crucial factor that sellers and agencies can no longer afford to overlook. Traditionally viewed as a soft metric, trust is now ...Read more
Property
LJ Hooker Lake Macquarie makes a splash with Belmont buy as real estate consolidation looms
LJ Hooker Lake Macquarie’s acquisition of the Belmont office, including its rent roll, is less about shopfronts and more about balance‑sheet resilience. In a market where listings ebb and flow with ...Read more
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
