We have seen recent coverage of the APRA super data illustrate the importance of distribution channels in dictating the movement of large balance pre-retirees – and, in turn, competitive net cash flows. The findings are clear: there is strong member demand for advisers who can help them navigate the complexities and nuances of retirement planning.
As new lifetime income streams are developed and added to super funds' retirement product propositions, now is a critical time to reflect upon how these products are incorporated into retirement income solutions (inclusive of the Age Pension) and how these solutions are communicated to members. The reality is that these products fundamentally differ from account-based pensions, introducing a third common income layer to retirement income solutions. Whether you are an adviser or developing a digital advice offering, this additional complexity needs to be handled with care, with clear and accurate communication of concepts such as market risk and longevity risk.
On top of this, we are seeing many new lifetime income streams that can be purchased during the accumulation phase, with potentially significant social security benefits accruing to early buyers. In an industry seeking more objectivity, especially as it relates to member outcomes, the planning tools of the future need to clearly communicate how these products affect future Age Pension entitlements.
Deloitte's PHOEBE Retirement Engine was developed at Rice Warner many years ago, but it is continually enhanced and kept up to date with features such as those described above. Today, it supports clients with market-leading advice and self-service calculator propositions. If you're seeking to reduce the cost of delivering advice, or looking to create cutting-edge digital advice solutions, please get in touch and we can explore options together.