Retirement income market needs new strategies

Private market providers across Asia-Pacific could potentially fill gaps existing from government sponsored retirement systems and employer-sponsored pension arrangements, according to global consulting firm, Milliman.

A survey of insurance companies and financial institutions conducted by Milliman across eight countries showed consumer demand, product development, and opportunity for growth were amongst the key factors most affecting the Asian retirement income market.

Milliman South-East Asia and India managing director, Richard Holloway, said new perspectives on ways to capitalise were coming from technology employed in Australia’s retirement sector, and potential interest from private providers.

“Across Asia-Pacific, there is the potential for private market providers to complement and fill gaps that exist from government sponsored retirement systems,” he said.

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“The development of robo-advice has begun to gain traction in the superannuation industry in Australia and we expect the same to occur in Asia in the near future.”

Holloway said other nations across the Asia-Pacific region were likely to follow after Australia’s superannuation system which had leveraged technology effectively.

“Technology advancements have now made it possible for financial institutions to provide consumers with tailored investment strategies and product solutions to achieve their goals in retirement,” he said.

More than 60 per cent of respondents to the Milliman survey believed financial advice was needed around the selection of features in a retirement income product, while most believed their national retirement system’s provisions were inadequate.