FUM in retirement income continues to fall

While funds under management and advice (FUMA) held in retail and wholesale managed funds grew by 5.42 over the last year, FUMA in retirement incomes continues to fall, data from DEXX&R shows.

Personal super saw the largest jump in FUMA, with an $18.1 billion or 8.73 per cent increase for the year, while employer super increased $7 billion or 4.75 per cent. Retail investment (non-super) recorded a 7.05 per cent increase of $14.1 billion.

Of the largest retail and wholesale managers, NAB recorded a 5 per cent increase, AMP 5.9 per cent, CBA 3.5 per cent, Westpac 3.3 per cent and Macquarie 5.6 per cent.

While managed funds saw increased FUMA for the year, they did not fare as well for the most recent quarter. Total retail and wholesale FUMA decreased by 1.22 per cent or $15.5 billion in the March quarter.

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FUMA in retirement incomes continued its decline, falling by 4.3 per cent in the year to March 2018 to $173.4 billion. FUMA in allocated pensions specifically decreased 4.3 per cent or $7.8 billion over the year.

FUMA in immediate annuity total assets grew, however, up 9.9 per cent or $1.1 billion at the end of March this year as compared to March 2017, hitting $13 billion.

According to DEXX&R, Challenger Life was the main beneficiary of this as it benefited from the wider availability of its immediate annuities in the retirement income divisions of industry super funds and retail platforms.

During the March quarter, retirement income net cash flows were negative $1.9 billion, lower than the negative $2.5 billion seen in the December quarter. DEXX&R said this showed the impact of the $1.6 million lifetime account cap which took effect from last July.