TWILIGHT SEMINAR SERIES INDUSTRY RATIONALISATION THE THINGS FUNDS - - PowerPoint PPT Presentation
TWILIGHT SEMINAR SERIES INDUSTRY RATIONALISATION THE THINGS FUNDS NEED TO DO TO PROSPER FEBRUARY 2016 [Date] FUTURE DISRUPTIVE TECHNOLOGIES Session One Michael Rice Colin Kelton Roland Slee CEO, Rice Warner Managing Director,
FEBRUARY 2016
[Date]
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An Australian view
Michael Rice CEO, Rice Warner
Trends in the USA
Colin Kelton Managing Director, Vanguard
Trends in the UK
Roland Slee Managing Director, Bravura
Session One
Michael Rice Rice Warner
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EVENT OUTCOME
fund brands and marketing
strategies and financial advice models
It has facilitated growth of online sharebrokers
Expansion of products
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Colin Kelton Vanguard
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Roland Slee Bravura
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Heather Brown Consultant Nathan Bonarius Consultant Steve Freeborn Head of Client Relationships
Session Two
SUPER INSIGHTS ENGAGEMENT LOYALTY
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Nathan Bonarius Consultant
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Rule Number 1 – Know your member
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But… Superannuation funds don’t always know everything they need to know about their members
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24 Funds 10.8 m member accounts
38% of the total Superannuation market by member account
$346 Bn FUM
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0% 10% 20% 30% 40% 50% 60% 70% 80% Selecting a Choice Investment Invested in Growth Assets
Investment Decisions: Male vs. Female
Male Female
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Sometimes a variable isn’t as big an influence as you think…let the data talk for itself
What key developments are happening in the market now Heather Brown Consultant
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The Superannuation market is ever changing.
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Current financial burdens take priority now.
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Retirement Superannuation Investments Saving Budgeting
Members want to find solutions for themselves.
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Caring for elderly relatives Career break Maternity leave Attitudes to investment Engagement
Women and Men engage differently with Super.
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Strategy Benchmarking Solution implementation Gender specific financial planning Online tools Member briefings
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Quick and easy access to information.
Where we see the future going Steve Freeborn Head of Client Relationships
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What will drive action by members?
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First to get it right will win!
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The challenge is retaining members in the face of competition.
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Retaining members through retirement.
Greg Cantor
CEO Australian Catholic Superannuation & Retirement Fund
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This presentation has been prepared by SCS Super Pty Ltd (CAN 064 712 607, AFSL 230544, RSE L0002264), the trustee of the Australian Catholic Superannuation & Retirement Fund ABN 24 680 629 023, RSE R1055436. Any advice contained in this presentation is of a general nature only, and does not take into account your personal objectives, financial situation or
take into account your own financial circumstances, consider the Product Disclosure Statement for any product you are considering and seek independent financial advice if you are unsure of what action to take. The material contained in this presentation is based on information received in good faith from sources within the market and on our understanding of the legislation at this time.
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What is RetireSmart?
1. RetireSmart is an account based pension product that was developed in consultation with Rice Warner and our investment consultant
Superannuation to a Pension and receive an income on a weekly, fortnightly, monthly, bi-annual or annual basis 3. RetireSmart is also open to members who are transitioning to retirement
investment options and have some tolerance to risk 5. RetireSmart is a retirement-specific solution designed to assist members in meeting their income and expenditure needs in retirement
members a reliable stream of income, whilst also allowing for capital growth to help preserve their balance
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RetireSmart’s core feature is the design of its simple two bucket approach and how the distribution of income and earnings serves to provide members with a greater level of reliability and comfort around their pension payments and where these are drawn down from. This design feature avoids the need to regularly sell assets such as shares in order to supplement pension payments and avoids the need to time the selling of assets to avoid crystallising any losses.
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While pension payments from the Growth
investments (which may need to occur during times when investment markets are down), pension payments from RetireSmart are only made from the Cash Bucket – this is unless, a member requires to make a withdrawal that is larger than the balance of the Cash Bucket
a) Growth b) Cash
yearly or yearly and are taken from this Cash option
transferred to Cash
(3.5%) are processed annually from Growth to Cash
amount into the Growth option
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Asset Classes Australian Shares 30 20
International Shares 33 20
Infrastructure 8
Property 8
Alternatives 10
Multi-Asset 8
Bonds 3
Cash & Term Deposits
Total Assets 100 Currency Hedging International Shares 50
FX Exposure in Infrastructure 50
FX Exposure in Property 50
FX Exposure in Alternatives 50
FX Exposure in Bonds
RetireSmart Growth SAA (%) Ranges (%)
High dividend paying to utilise income and franking credits
would we combine the two or would they be separate
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The years that followed 1969 saw equity markets collapse as a result of the global oil crisis. With a member retiring at 65, in 1969, projecting their retirement savings across life expectancies, (as depicted by the vertical lines), our modelling shows that the Growth option with 3 years’ cash and the Balanced option with 2 years’ cash suffer similar losses during market downturns, but the Growth option experiences a better recovery as markets recover. While the Growth option with 2 years’ cash suffers the greatest losses during market downturns, it is however able to recover and deliver a better outcome than the Balanced option with two years’ cash.
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Source - Rice Warner
With a member retiring in 2004, into what is a rising market and subsequent GFC,
years’ cash achieve similar outcomes, while the Balanced option, although suffering the least during the GFC, is not able to recover strongly enough into a recovering market, and therefore lags.
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Source - Rice Warner
SYDNEY
Level 1 2 Martin Place Sydney NSW 2000 P +61 2 9293 3700 F +61 2 9233 5847
MELBOURNE
Level 20 303 Collins Street Melbourne VIC 3000 P +61 3 8621 4100 F +61 3 8621 4111 ABN 35 003 186 883 AFSL 239 191 www.ricewarner.com