Retirement consultants are likely to be a new growth segment in the financial services industry as superannuation funds seek to find ways to remain relevant in the drawdown phase, according to new research from Milliman.
The research, released today, claims superannuation funds are having to reassess their futures as they seek to respond to members moving out of the accumulation phase and into drawdown.
"This change requires new thinking, and new advice to funds seeking to maintain their relevance," the Milliman research said. "We believe this creates significant opportunities — enter the retirement consultant."
It said the modern retirement consultant would need to add and co-ordinate a broad mix of skills to meet the increasingly complex needs of the superannuation industry, including actuarial, in circumstances where funds have an increasing need for actuarial skills which can help them model member behaviour, changes in legislation and the impact of the Age Pension, risk management strategies, and post-retirement product design.
The research suggested that retirement consultants would also need to be able to deal with data analysis and investment management, behavioural finance and communications.
"The growing realisation that super funds must focus on managing members' money for the best retirement outcome — rather than for the highest balance at retirement — makes the nature of the advice they require more complex," it said. "A retirement consultant will bring important new retirement-focused skills to the table but few individuals or organisations will possess all of the skills needed. It will instead require a best-of-breed approach."
The Milliman analysis suggested that, for example, in the new landscape, asset consultants would no longer be able to provide all investment advice and might even require re-training to remain in line with funds' new retirement-oriented focus.
It suggested a retirement consultant could help manage and co-ordinate a larger suite of advisers and ensure that they were all working towards the same goals.