Change super focus from account balances
Superannuation funds would be helping their members more if they focused on informing them about their future retirement incomes rather than focusing on account balances.
Former Cooper Review chairman, and now Challenger executive, Jeremy Cooper, joined with former Australian Workers' Union national secretary and now KPMG consultant, Paul Howes, to argue during the Financial Services Council (FSC) annual conference that there was not enough focus being give to retirement incomes, particularly in the context of retirement income streams.
Cooper said he believed there was good reason for the Government to mandate retirement income stream products as a default in circumstances where they might only become the preserve of larger, more advanced funds.
Mercer senior partner, David Knox, said he also agreed that there was a need for change in circumstances where it was clear that account-based pensions represented a part of the overall solution.
"We need to recognise the longevity risks and the benefits of pooling," he said.
"We are not focusing enough on giving members a projection of their retirement incomes, we are focusing too much on account balances," Knox said.
Howes agrees with the undue focus on account balances and said that this had too often led to members making poor decisions, particularly at times of poor investment returns.
Recommended for you
Sharing his reasoning in joining the FSC board, WT Financial chief executive, Keith Cullen, believes “product and advice cannot be separated” from each other in the current environment.
The Emerge Foundation, a charity run by financial advisers and fund managers, has announced a scholarship program to help veterans transition into tertiary education.
In an open letter, Sequoia chief executive Garry Crole has hit out against shareholders “with a personal axe to grind” as he fights for his job ahead of an EGM.
The JAWG has announced it is in talks with Treasury around five “core principles” to strengthen the education standards for new entrants to the financial advice space.
