Australian planning strategies weak on risk communication: Milliman
|
|
Financial planning strategy frameworks in Australia do not appropriately communicate risk, or account for full value through the wealth management lifecycle, according to consulting and actuarial firm Milliman.
Sydney practice leader Wade Matterson said recent market conditions and a shift away from asset accumulation to the development of income streams by baby boomers has highlighted these flaws.
“Australians in retirement and those planning for retirement are being exposed to increased risks due to changing demographics and continued market volatility, but the market has been slow to recognise and act upon the needs brought on by these changes.”
However, Matterson said continued pressure on the financial planning community would “create incentives” for the development of a holistic financial planning framework.
“We anticipate that the movement towards fee-for-service models, combined with the trend towards limited advice offered by superannuation funds, will force planners to reassess their approach.”
The natural outcome of this will be that financial planning frameworks evolve to cater for the wealth-management lifecycle of an individual.
“The challenge is to find an approach that can engage people early in planning for a retirement that may be 20 or 30 years away.
“A framework that incorporates current assets with future earnings (human capital) will demonstrate the impact that early planning can have on retirement outcomes.”
Recommended for you
The central bank has released its decision on the official cash rate following its November monetary policy meeting.
ASIC has cancelled the AFSL of a Melbourne-based managed investment scheme operator over a failure to pay industry levies and meet its statutory audit and financial reporting lodgement obligations.
Melbourne advice firm Hewison Private Wealth has marked four decades of service after making its start in 1985 as a “truly independent advice business” in a largely product-led market.
HLB Mann Judd Perth has announced its acquisition of a WA business advisory firm, growing its presence in the region, along with 10 appointments across the firm’s national network.
