Chant West, a reputable research firm, has recently introduced a groundbreaking service known as Lifetime Product Ratings for the superannuation sector. This new offering is designed to evaluate the quality of lifetime products, which are instrumental in providing a steady income stream for members of super funds throughout their lives. The criteria used in this assessment encompass various aspects such as features, fees, investments, and services offered by these products. One notable inclusion is the comparison of projected outcomes between lifetime products and account-based pensions.
While the current availability of lifetime products is limited to a few funds, Chant West foresees a significant upsurge in their provision over the next couple of years. This anticipated growth is attributed to the proactive support from Treasury and regulatory bodies. Ian Fryer, the general manager at Chant West, emphasized the timeliness of offering detailed research to financial advisors on lifetime products. The focus lies not only on the functionality of these products but also on evaluating how effectively they fulfill their intended purpose.
Developing a robust projection model was crucial for Chant West in evaluating the diverse benefits and features offered by lifetime products. This model enables a comprehensive assessment of how these products stack up against account-based pensions and their efficiency in delivering lifetime income compared to other options. Additionally, a key aspect of evaluation is the provider’s facilitation of member access to these products, which varies based on distribution channels – whether through advisers or direct purchase by fund members.
In a recent discussion with Super Review, Mano Mohankumar, the senior investment research manager at Chant West, highlighted a slight decline in the median growth super option due to market volatility triggered by unpredictable policy decisions. Despite this, he expressed confidence in the resilience of funds with well-diversified portfolios to withstand short-term fluctuations. Mohankumar emphasized that the long-term investment strategies of super funds, which include diversified portfolios encompassing various asset classes, play a vital role in cushioning returns during market uncertainties.
The introduction of Lifetime Product Ratings by Chant West marks a significant advancement in the superannuation landscape, providing valuable insights for both fund members and financial advisors. As the industry anticipates a surge in the availability of lifetime products, this new service is poised to play a pivotal role in guiding stakeholders towards informed decision-making and ensuring the long-term financial security of super fund members.
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