The gender disparity in Superannuation, for both retirement balances and years of retirement, is real. And women face a continued tougher retirement should current trends continue. As a Financial Adviser, how can you adjust your message in a way that’s enlightening, and not alienating for your female participants?
The federal government has taken a step toward providing better retirement outcomes for Australians with the appointment of an industry panel to advise on the development of Comprehensive Income Products for Retirement (CIPRs), but experience from other markets shows that the key to creating a successful retirement-income solution might lie in understanding, and allowing for, a range of factors beyond that of simple product design.
Alternatives have fallen out of favour in an equity bull market fuelled by extremely accommodative monetary policies.
Today, as central banks normalise monetary policies and volatility is on the rise, alternatives are a good addition to portfolios, particularly for retirees who need to be aware of issues in regard to longevity and sequencing risk.
In Invesco’s paper, Walter Davis, Invesco’s Alternatives Investment Strategist, argues that now is the time to invest in alternatives, and that advisers and retiree investors should consider adding or increasing their allocation to alternatives as they review their portfolio exposures for the coming year
Last week Wall Street fell over 1,000 points, reversing the sharp rises of earlier in the month. Many are now asking if this is the start of a new trend on markets and what it all means for the Australian sharemarket.
A person’s subjective perceptions about causes of death can be a driver of distorted survival beliefs. These distortions are meaningfully related to financial decision-making.
In an Invesco interview, we learn about Dr. Raphael Schoenle’s research on the connection between distorted mortality beliefs and savings behaviour.
Retirees and other investors worried about financial market volatility have a range of low-volatility investment strategies to choose from, but how should they think about managing this risk from an asset allocation perspective?
Retirees have good reason to be wary of rising inflation. It can quickly destroy the value of a lifetime’s savings and with it, their quality of life. But that doesn’t mean inflation is an appropriate benchmark.
The continued success and profitability of Australian banks over the last few decades, as well as recent large capital raisings, means that Australia's big 4 banks are now valued at over $400 billion and account for over 26% of the S&P/ASX 300 index.
Longevity and sequencing risk: Using alternative investments to address pre- and post-retirement issues
A common dilemma for investors, both institutional and individual, is how to generate attractive returns to fund a comfortable retirement (longevity risk) while at the same time avoiding damaging losses that could impair their retirement (sequencing risk).
The superannuation industry isn’t quite sure what a comfortable retirement is – even as it desperately works to help members achieve that elusive goal.
Most advisers have heard that the Government is currently consulting on a framework for 'MyRetirement' (previously known as CIPRs), and are wondering what the reforms mean for them and their clients.
Fluctuations in the Australian dollar can cause changes to the value of your international equity investments, sometimes significant enough to put into question investors’ ability to achieve their goals, such as achieving a more stable return profile during retirement.
Sydney-based retirees who rent privately may have to save more than four times the amount of superannuation if they expect to live the same lifestyle as homeowners who own their homes outright, according to the latest Milliman Retirement Expectations and Spending Profiles report.
Retirees are often exposed to substantial income domestically, but in an increasingly global world where else can they look?
For retirees, it’s important to be aware that correlations between equities and bonds change over time. Therefore, an asset allocation approach to investing carries inherent risks because equities and bonds can fall at the same time (i.e. there have been a number of periods historically when the correlation between equities and bonds has been positive).
Given the Australian sharemarket is heavily skewed towards the volatile Resource sector and high yielding yet mature Banking sector, retirees may consider a small allocation to the quality mid and small cap market to achieve proper diversification to good quality Australian listed companies.
Retirees require one thing above all from their investment portfolios: a steady stream of income to cover their living costs and occasional unforeseen expenses. Given the importance of this, it’s a challenge for the retirement industry that investors don’t take more interest in income investing.
The superannuation industry has placed an extraordinary emphasis on helping members achieve a “comfortable” retirement given it has so little information about what it actually means.
There are clear reasons why risk tolerance drives the financial advice process.
It produces a simple number, which makes it relatively easy to recommend investment products while maintaining a compliant paper trail. But such a heavy reliance on risk tolerance can also produce significant problems.
“Alternatives are a bit like the [proverbial] tortoise, historically taking a slow and steady approach by generating consistent and less volatile returns than stocks. Stocks are more like the hare in that they have the potential to generate significant returns quickly, but may also experience sharp periods of negative performance.”