Addressing longevity risks among retirees and self-managed super fund (SMSF) holders who will outlive their retirement savings is one of the biggest challenges facing advisers, one SMSF expert believes.
Australian Superannuation and Compliance founding principal and director, Ravi Subramaniam, said advisers and service providers will need to advise on the long term investment strategies according to the groups' lifestyle goals.
"The new SMSF era will need to deal with the impact of the baby boomer investors ceasing their contributions to enter retirement and as a consequence this — added to the impact of benefit payments and drawdowns from funds — will combine to surpass those contributions for the first time," Subramaniam said.
Subramaniam is also concerned about the administration costs of an SMSF by service providers, which he says is rising every year as increased regulation makes the administrative process of compliance the most difficult area.
"It is not being helped by the burden being placed onto the administrator service providers to absorb," he said.
Going forward, clients will demand specialist practitioners with SMSF specialist adviser qualifications from the SMSF Association, which will see generalist SMSF adviser numbers take a hit.
