POWERED BY MOMENTUM MEDIA
Lifecycle products too risky: Rice Warner
Lifecycle products fail to adequately address the risks that can eat away at members' retirement incomes, according to Rice Warner Actuaries.
It hit out at the concept of lifecycle products as a holistic solution to managing retirement income, as the products assumed members were the same rather than addressing an individual member's needs.
Volatility risk may be at the forefront of trustees' minds and driving the adoption of lifecycle products, Rice Warner said, because the results were reflected in returns and showed up on members' statements.
But member statements were a reflection of the past and did not look forward to the member's retirement, Rice Warner said.
Lifecycle products might deal with volatility but they did not guard against inflation risk and longevity risk, it said.
"The key to improving retirement outcomes is to manage members' funds up to and throughout retirement," said Rice Warner's chief executive Michael Rice.
Rice Warner's modeling had shown lifecycle products often provided similar returns to the fixed balanced option.
Mark Blair, Rice Warner's head of superannuation, said a typical lifecycle investment option was an asset-only solution up to the point of retirement, while a holistic solution matched a fund's asset and member needs up to and throughout retirement - it was member-centric and advice driven.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
Super funds have built on early financial year momentum, as growth funds deliver strong results driven by equities and resilient bonds.
The super fund has announced that Mark Rider will step down from his position of chief investment officer (CIO) after deciding to “semi-retire” from full-time work.
Rest has joined forces with alternative asset manager Blue Owl Capital, co-investing in a real estate trust, with the aim of capitalising on systemic changes in debt financing.
The Future Fund’s CIO Ben Samild has announced his resignation, with his deputy to assume the role of interim CIO.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
76.97 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
76.46 3 y p.a(%)
3
UBS Solactive Global Pure Gold Miners UCITS ETF Dis USD
51.13 3 y p.a(%)
4
Global X GlobalX FANG+ ETF
45.15 3 y p.a(%)
5
Select Baker steel Gold Institutional
43.78 3 y p.a(%)
