TWILIGHT SEMINAR SERIES INDUSTRY RATIONALISATION ‘THE THINGS FUNDS NEED TO DO TO PROSPER’ FEBRUARY 2016 [Date]
FUTURE DISRUPTIVE TECHNOLOGIES Session One Michael Rice Robin Bowerman Roland Slee CEO, Rice Warner Principal, Vanguard Managing Director, Bravura An Australian view Trends in the USA Trends in the UK 1
An Australian view Michael Rice Rice Warner 2
EVENT OUTCOME Award Super & SG Growth of industry funds SIS legislation Demise of corporate funds Past Disruption in Licensing ASIC (AFSL) and APRA (RSE) Superannuation Growth of superannuation Choice of Fund fund brands and marketing Growth of retirement Baby-boomers retiring strategies and financial advice models ASX Chess Growth of SMSF’s 3
It has facilitated growth of online sharebrokers Expanded retail investors Driven down transaction fees for share-trading Impact of Expansion of products CHESS Exchange Traded Funds (ETFs) mfunds (managed funds) Direct investment in international shares Interest Rate Securities Derivatives 4
Financial advice Retirement strategies Future Life insurance Disruption Administration Investment 5
Trends in the USA Colin Kelton Vanguard 6
Trends in the UK Roland Slee Bravura 7
SUPERANNUATION FUND INTERACTIONS WITH MEMBERS Session Two Heather Brown Nathan Bonarius Steve Freeborn Consultant Consultant Head of Client Relationships 8
SUPER INSIGHTS AGENDA ENGAGEMENT LOYALTY 9
An Insight into the Future Nathan Bonarius Consultant 10
Rule Number 1 – Know your member Member engagement But… Superannuation funds don’t always know everything they need to know about their members 11
24 Funds 10.8 m member $346 Bn FUM accounts Super Insights 38% of the total Superannuation market by member account 12
Consolidation 13
Consolidation 14
Insurance 15
Investment Decisions: Male vs. Female 80% 70% Investment 60% choice by 50% Gender 40% 30% 20% 10% 0% Selecting a Choice Investment Invested in Growth Assets Male Female 16
Exits destinations 17
Pensioners - Drawdown Rates 18
Variations between funds 19
Lessons learnt Sometimes a variable isn’t as big an influence as you think…let the data talk for itself 20
Engagement What key developments are happening in the market now Heather Brown Consultant 21
Member needs The Superannuation market is ever changing. 22
Attitudes and behaviours Current financial burdens take priority now. 23
Superannuation Budgeting Saving Self- Retirement Investments Education Members want to find solutions for themselves. 24
Career break Engagement Maternity leave Caring for elderly Attitudes to Gender focus relatives investment Women and Men engage differently with Super. 25
Benchmarking Women Strategy Solution implementation incentives and engagement strategies Member briefings Online tools Gender specific financial planning 26
Education Quick and easy access to information. 27
Loyalty Where we see the future going Steve Freeborn Head of Client Relationships 28
Loyalty The challenge is retaining members in the face of competition. 29
Digital Disruption First to get it right will win! 30
Human Behaviour What will drive action by members? 31
End game Retaining members through retirement. 32
What is an appropriate Retirement Solution for members? Scott Hartley CEO A Sunsuper perspective Sunsuper 33
Making hard things in retirement easy and helping members before they know they need it. A service led strategy supported by a quality product suite (and not the other way around). Providing advice for all members leading to and through Our Beliefs retirement. A simple for members, low cost offer. Cushioning members from losses in down markets whilst investing for growth. Believe in providing members with longevity protection options. 34
Not at all concerned Not very concerned Neutral Somewhat concerned Very concerned Can't say/not applicable 1 1 1 1 1 1 1 1 1 1 2 1 1 4 7 6 10 10 7 12 13 14 15 14 15 16 15 16 28 23 25 21 23 24 25 24 27 31 30 31 30 31 37 14 15 12 13 Cost of Living 16 32 12 15 14 10 12 14 14 14 25 22 Concern 29 13 26 25 25 23 11 24 24 23 25 23 22 25 22 31 30 27 26 23 23 23 21 20 18 16 16 16 8 6 TOTAL 50-59 60-69 70-79 80+ MALE FEMALE NSW VIC QLD OTHER <$20,000 $20,000-39,999 $40,000-59,999 $60,000+ AGE GENDER STATE PERSONAL INCOME 35
Not at all concerned Not very concerned Neutral Somewhat concerned Very concerned Can't say/not applicable 0 0 0 1 1 1 1 2 1 1 2 2 1 2 4 16 20 14 19 21 19 23 25 26 29 32 33 31 40 45 20 29 26 28 28 29 Financial 30 29 31 26 11 30 31 9 33 11 Longevity 8 8 11 34 29 9 8 14 25 10 7 8 Concern 23 31 8 28 28 28 22 23 7 19 8 21 23 19 19 25 16 17 20 16 15 14 13 12 13 13 12 10 9 7 3 2 TOTAL 50-59 60-69 70-79 80+ MALE FEMALE NSW VIC QLD OTHER <$20,000 $20,000-39,999 $40,000-59,999 $60,000+ AGE GENDER STATE PERSONAL INCOME 36
Not at all concerned Not very concerned Neutral Somewhat concerned Very concerned Can't say/not applicable 1 2 3 3 2 4 5 5 5 6 5 5 6 7 9 15 21 22 17 10 22 18 17 20 25 19 30 21 23 21 14 19 19 18 20 21 20 22 24 24 24 24 24 Access to 17 26 17 34 15 21 17 19 19 13 17 11 Advice 17 18 20 17 25 21 24 18 22 19 22 19 19 16 21 17 Concern 15 18 31 13 13 22 22 20 20 18 18 18 18 16 16 16 14 8 6 TOTAL 50-59 60-69 70-79 80+ MALE FEMALE NSW VIC OTHER <$20,000 $20,000-39,999 $40,000-59,999 $60,000+ QLD AGE GENDER STATE PERSONAL INCOME 37
-15% -12% -10% -5% -5% -3% -1% 0% 0% 0% 0% 0% Cumulative 1% 1% 3% 5% 4% Drawdown 6% 10% Rates 11% 13% 15% Tenure in pension Original balances Minimum or above 38
Money spent in retirement 10% 10/30/60 Rule 30% 60% Money saved during working years Growth of savings before retirement Growth during retirement 39
$1,600,000 $1,400,000 Home ownership $1,200,000 Lifetime Value of Assets $1,000,000 These are effectively (typical $800,000 inflation adjusted lifetime annuities Age pension Sunsuper $600,000 retiree) $400,000 Medicare and seniors discounts $200,000 Why further annuitise Super these members? $0 40
Sample population of 60 year old males Average life expectancy of 83 5% 15% income income Efficiency of a Pooled Approach Individual approach Pooled approach Minimum drawdown due to Higher drawdown due to certainty uncertainty Average annual income of 15% Average annual income of 5% Virtually all assets utilised during 67% of assets not utilised during lifetime lifetime 41
Please join us for refreshments and canapes Material available online ricewarner.com/twilight-seminar-series-literature/ 42
SYDNEY MELBOURNE ABN 35 003 186 883 AFSL 239 191 Level 1 Level 20 2 Martin Place 303 Collins Street Sydney NSW 2000 Melbourne VIC 3000 P +61 2 9293 3700 P +61 3 8621 4100 www.ricewarner.com F +61 2 9233 5847 F +61 3 8621 4111
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