Despite product providers’ reluctancy to put retirement income solutions out on the market until regulators have given a sense of direction, the prudential regulator is not planning to issue extensive or detailed guidance in the short-term.
During a speech, the Australian Prudential Regulation Authority (APRA) deputy chair, Helen Rowell, said the regulator was increasing its focus on the provision of better retirement income solutions.
“APRA is already thinking about potential changes to the regulatory framework that may be required, however it’s difficult to make informed judgements about the types of risks that would demand APRA guidance until we see what types of products are coming to market – another chicken and egg-type impasse,” she said.
“APRA will instead continue to engage with the wealth management industry on these issues.
“We continue to make clear that APRA is thinking carefully about what might be needed in terms of guidance, but we don’t plan to issue extensive or detailed guidance on the covenant in the short-term. We want to allow time for industry thinking and approaches to develop.”
Rowell said the authority was “well-placed” to collect and publish insights from its data collections to help the industry better understand member needs across different life stages.
“This will reduce one of the key obstacles to product design – lack of access to meaningful information,” she said.
“As the market evolves, APRA will be keen to support the industry through sharing examples of better practice to further assist the development of new products.”