Ensuring annuities are available through platforms is driving growing use of the guaranteed income products, Challenger chief executive, Brian Benari believes.
In a statement to the Australian Securities Exchange (ASX), the fund manager revealed annuity sales jumped 29 per cent in the March quarter, compared to the corresponding period, to $575 million, with term annuities up 22 per cent, and lifetime annuities up 63 per cent.
The firm noted that more than 50 per cent of platform sales in the quarter came from advisers who had not traditionally sold Challenger annuities.
“The key stand out is the step up in lifetime annuity sales which accounted for 23 per cent of sales in the quarter and benefitted from our move to embed annuities on platforms,” Benari said.
“This resulted in flows through Colonial First State, being up more than 100 per cent on the same period last year.
“During the quarter there was significant progress on the regulatory reform agenda.
Treasury is currently setting the objective of superannuation. This is critical to prepare Australia for one of the great social and economic issues of our time — the ageing of Australia’s population. Making it clear that superannuation is to provide income in retirement provides government and industry the framework to tackle this challenge.
“It’s also the first logical step in an expected series of reforms, including a review of retirement income streams regulation and the development of comprehensive income products for retirement.”
