Achieving better income and growth outcomes for your clients
Without a doubt, today’s financial advisers have an incredible task on their hands in meeting the post retirement income challenge. During periods over the last two decades we have witnessed:
- structural shifts in the global economy
- persistent, low yields
- lower investment growth prospects
- rising risks
Amidst this chaos, the traditional approach to retirement portfolio construction is frequently proving to be ineffective, often delivering sub-optimal income and capital growth, creating stress amongst retirees, worried they will outlive their savings. In fact, research conducted by Allianz shows that 61 per cent of retirees fear running out of money more than death itself1. What is more disturbing is that retirees are spending less, downgrading their lifestyle and potentially living below the poverty line.
With ever-increasing retiree lifespans, persistent low yields and volatile markets at play, there has to be a better approach to help re-ignite confidence amongst retirees and help them feel financially secure again.
Pivoting is required across the board
In order to survive in today’s environment, a lot of businesses have had to pivot. Retirement strategies and portfolios also need to be revisited and in some instances, turned on their head, to provide adequate defence mechanisms, steady income and capital growth. It’s a balancing act but very possible to achieve providing the right strategies are in place.
Investing in retirement is different – according to the investment experts
We conducted a series of educational webinars (CPD applicable) recently with some key investment specialists. Our objective was to better understand the pain points experienced by financial advisers and their clients when it comes to retirement portfolios and why a re-think is required.
Each of these can be accessed via the Adviser Portal, our dedicated portal for advisers to access education, tools and policy information. Registration is simple.
Module 1: Retirement Risks and Challenges – Sequencing risk, low yields, low growth and longer life expectancies. What are the risks in retirement and how do you manage them to avoid costly consequences?
Module 2: Building Portfolios for Retirees – Lonsec’s Head of Investment Consulting, Veronica Klaus discusses the need to address the unique risks of retirement. How do you provide exposure to growth assets while ensuring retirement savings last?
Module 3: Building and Modelling Retirement Portfolios – OpenMarkets Advice, James Claridge demonstrates how next-gen stochastic modelling tools can help you construct and evaluate high confidence retirement portfolios.
Module 4: Retirement Tools and Solutions – Not all retirement solutions are created equal.
Francis Rigby, Advice Development Manager, Financial Advice Matters and Andrew Creaser, Partner, FinSec Partners discuss the challenges and issues with building retirement portfolios. Andrew also discusses the historic use of a platform provider’s protected option and the renewed need to consider a different ‘layer’ (in his clients’ portfolios) in light of expense versus investment return outcomes.
Purpose built retirement tools & solutions: Help generate better outcomes with more certainty
At one point in time, advisers could lean on traditional defensive assets such as cash, fixed income and annuities to help deliver meaningful income and capital protection for their clients. This is no longer the case and unlikely to be for the foreseeable future. The landscape has changed.
Informed by extensive research and to help address the retiree income challenge, Allianz Retire+ developed Future Safe.
Future Safe is an innovative retirement solution that seeks to provide the return of a chosen equity index within a cap and a floor. With greater certainty of a range of returns and downside protection, Advisers may utilise this solution as a defensive alternative.
To help illustrate its effectiveness, we partnered with Investfit and developed a powerful stochastic simulation tool called the Retirement Portfolio Illustration Tool. By generating over a thousand different hypothetical scenarios at chosen levels of volatility and confidence, the tool is designed to illustrate the benefit that Future Safe may provide in a retirement portfolio.
Purpose built retirement tools & solutions: Help generate better outcomes with more certainty.
The triple threat: Future Safe + modelling + revised strategy
Challenging times need to be met head on with innovative solutions.
Future Safe is a unique retirement investment solution designed to solve unique risks and provide clients with more certainty. Together with our stochastic modelling tool, advisers can reshape their strategies and continue to achieve retirement outcomes and retiree confidence.
At Allianz Retire+, our goal is to help Australians feel like they can really retire. If you’re interested in finding out more about our solutions or how to adapt your portfolios in today’s environment, please speak to one of our state representatives.
¹ Allianz Life, Reclaiming The Future Study,” 2010.
This material is issued by Allianz Australia Life Insurance Limited, ABN 27 076 033 782, AFSL 296559 (Allianz Retire+). Allianz Retire+ is a registered business name of Allianz Australia Life Insurance Limited.
This information is current as at 29 March 2021 unless otherwise specified. This information has been prepared specifically for authorised financial advisers in Australia, and is not intended for retail investors. It does not take account of any person’s objectives, financial situation or needs. Before acting on anything contained in this material, you should consider the appropriateness of the information received, having regard to your objectives, financial situation and needs.
The returns on the Future Safe product are subject to a number of variables including investor elections, market performance and other external factors, and may differ from the information contained herein. Past performance is not a reliable indicator of future performance.
No person should rely on the content of this material or act on the basis of anything stated in this material. Allianz Retire+ and its related entities, agents or employees do not accept any liability for any loss arising whether directly or indirectly from any use of this material.
Allianz Australia Life Insurance Limited is the issuer of Future Safe. Prior to making an investment decision, investors should consider the relevant Product Disclosure Statement (PDS) which is available on our website (www.allianzretireplus.com.au).
PIMCO provides investment management and other support services to Allianz Australia Life Insurance Limited but is not responsible for the performance of any Allianz Retire+ product, or any other product or service promoted or supplied by Allianz. Use of the POWERED BY PIMCO trade mark, or any other use of the PIMCO name, is not a recommendation of any particular security, strategy or investment product.