Solving the nation’s biggest economic challenge

Longevity is a two-edged sword – providing Australians with greater active lifespans but also requiring their financial resources to effectively stretch over a greater number of years. As Australia searches for new ways to tackle the challenge of supporting an ageing population, it’s more important than ever that key industries innovate to help build a better life for retirees.

What can the wealth management industry do to help solve this quandary? That’s the question tackled by BT Investment Management’s Chief Executive Officer, Emilio Gonzalez and Head of Income and Fixed Interest, Vimal Gor at the recent Lonsec Millman Retirement Symposium.

According to Emilio and Vimal, the answer lies in making investment products for retirees a priority, and changing the very way the industry thinks about retirement.

In particular, the wealth management industry needs to:

1. Change the way we think about demographics – people spend almost the same amount of time working as they do in retirement, and throughout their lives they have very different financial needs. The industry must develop products that more effectively differentiate based on the age of the investor.

2. Investment funds must evolve – in the coming years, funds should evolve to be more than an investment solution. There is opportunity for the industry to help meet retirees’ aged care and insurance challenges.

3. Transition to objectives-based investing – there should be less focus on asset allocation and more focus on objectives to meet investors’ specific needs. Funds should be designed to give investors more flexibility as their financial circumstances change.

BT Investment Management has recently taken out the Retirement Product Innovation category at the Money Management/Lonsec Fund Manager of the Year Awards for their Equity Income suite of retirement products.

The products focus on generating a high, consistent and known monthly income for investors, providing the option of both balanced and defensive funds. The products aim to provide an income of 6-7.5% pa* plus franking credits while reducing exposure to share market falls. Find out more about these products here.

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* Income based on pre-announced distributions for 6 months to 30 September 2014 and based on a $1 unit price. The value of your investment will go up and down over time.

The views expressed in this article are the author’s alone. They should not be otherwise attributed. BT Investment Management may hold securities mentioned. This is general investment information and does not take into account your objectives, financial situation or needs. Before acting on the information or advice, you should consider the appropriateness of the information or advice in relation to your objectives, financial situation or needs.

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