Greater product innovation in the decumulation phase, as well as better placement strategies with platforms are two areas the retirement income covenant (RIC) will help improve, according to Allianz Retire Plus.
Adrian Stewart, Allianz Retire Plus chief executive, said these were the two main concerns advisers had for retirement income solutions coming out of the retirement income review.
“First would be around product innovation; [advisers] are looking for innovative solutions to have access to and to recommend to clients in retirement,” Stewart said.
“If you think about the last 20 years, all of the innovation in the last 20 years has been on the accumulation phase.
“There’s been very little innovation in the decumulation phase, so advisers are really interested in what that looks like.
“They’re engaging with groups like us that are thinking about launching retirement income products and they’re really interested in what role they’ll have in a portfolio.”
The second thing, Stewart said, was ensuring advisers had access to these products and the product manufacturers ensured they had the right placement strategy with platforms.
“The adviser ecosystem is very old and constrained so they can comply with their compliance requirements,” Stewart said.
“It’s important that product manufacturers like us work with platforms to provide access to these innovative products.”
Stewart said the retirement income covenant would cause the financial planning community to really pay attention to the next generation of income solutions.
“Whilst its nots prescriptive in what they need to do, its framing up they do need to pay attention to finding solutions for retirees and think that’s a good thing,” Stewart said.
“We’ve seen already as this is coming through to take effect from 1 July next year.
“Large industry funds and super funds are approaching us to discuss what potential solutions we could work together with them on to provide their members, so that’s been encouraging.”