Post-retirement investors are seeking higher yielding products and strategies to better manage allocated pensions during both growth and bear markets, according to a poll of more than 400 advisers.
One interesting finding from the survey was an apparent lack of income stream product sophistication, with over a third of respondents advising clients to keep two to three years of cash to draw down in bear markets, and avoid having to cash in their growth investments while they were under-performing.
The survey, conducted by Tom Collins Consultancy (TCC), asked advisers about the types of products they would like to see developed as new retirement products.
The underlying theme from the results was that advisers and their clients are wanting new allocated pension strategies along with better income and cash investment products.
“We asked advisers if they had an allocated pension draw down strategy for a bear market situation. What we found was that people were struggling to find a strategy for structuring allocated pensions,” TCC principal Tom Collins says.
“The Australian financial services industry very much focuses on growth during the accumulation phase, and hasn’t woken up to the growing needs of the retirement market,” Collins adds.
In addition to allocated pension investors, the survey identified a growing sector of retirees with wealth ‘tied-up’ in their home, and who are experiencing income shortfalls in retirement.
“Currently the only real option for these people is the reverse mortgages offered by some banks and financiers. But our survey highlighted problems with these conventional products, such as debt ‘ballooning’ to exceed the value of the family home, and other social and familial consequences,” Collins says.
Other findings from the Mariner Retirement Solutions commissioned survey included 76 per cent of respondents stating they have clients who would be interested in products that could assist them access their wealth/equity.
Additionally 68 per cent of new client’s money is being channelled into wrap and master fund products.
