Retirement planners call for DLAs

Peker Recep

Peker Recep

More than 80 per cent of retirement planners are open to using deferred lifetime annuities (DLAs), according to new research from leading wealth researcher Investment Trends.

While they are not yet available in Australia, the Financial System Inquiry has recommended that the Government look at removing tax impediments to products like DLAs, which is part of the Treasury’s retirement income stream review.

The December 2014 Retirement Planner Report reveals that 83 per cent of planners are open to using DLAs or similar products. They identified access and flexibility as the most sought after features.

“There’s strong planner appetite for deferred lifetime annuities in Australia,” said Investment Trends Senior Analyst Recep Peker. “However, to ensure the success of DLAs product providers need to ensure that planners’ minimum product feature requirements are met.”

Of the planners who would use DLAs if they are made available, 54% said liquidity access was a necessary feature, followed by 40% who nominated the availability of DLAs in superannuation.

Among planners who already use annuities, the percentage open to deferred lifetime annuities rose to 96 per cent, demonstrating positive experience with annuity products.

Deferred lifetime annuities are pure longevity insurance products that can help clients mitigate longevity risk because the product makes future dated payments.

The December 2014 Retirement Planner Report, released to Investment Trends clients last month, is a comprehensive study of Australian financial planners and advice services for retirees and pre-retirees, together with the evolving attitudes and preferences of investors aged 40 and up. It is based on an in-depth survey of 617 financial planners between October and December 2014.

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