Retiree advice approach sub-optimal
The current financial advice model for retirees is inadequate, with the solutions for the retirement funding problem being very limited, according to a white paper released by research house Lonsec and consulting firm Milliman.
The financial services industry has been busy identifying and debating the issues of post-retirement investing, but solutions and responses have been thin on the ground, the paper said.
Lonsec and Milliman believe a new approach is required to create a new "advice solution", which meets both retirees' and advisers' needs.
Head of investment consulting at Lonsec, Lukasz de Pourbaix, said solutions to the retirement funding challenges to date have been product-driven rather then advice-driven, with many retirement strategies lacking analytical rigour.
"While there is a growing number of retirement products on the market, there continues to be a lack of guidance around constructing portfolios to meet retiree objectives, with much of the industry anchored to approaches more relevant to accumulators," Pourbaix said.
The white paper also suggests the product and advice process, as well as the wealth industry business model, must be re-engineered completely, in order for the sector to successfully "follow the money".
"It will be no small task, but the rewards for first movers who offer relevant, strategically-driven and robustly-tested advice solutions and products to retirees will be great," the paper concludes.
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