Colonial First State delivers a range of annuities via FirstChoice and FirstWrap platforms

Linda Elkins

Colonial First State announced that Challenger annuities are now available via its FirstWrap and FirstChoice platforms, alongside CommInsure annuities, which became available via those platforms in June 2015.

It is the first time any Australian platform has offered access to Australia’s leading annuity providers.

With Colonial First State’s FirstChoice platform used by more advisers than any other platform in Australia, and the FirstWrap platform among the top six[1], it means retirees and advisers now have easy and convenient access to annuities for retirement planning.

Linda Elkins, Executive General Manager Colonial First State, said being the first to provide annuities via platforms to retirees and advisers was an exciting achievement.

“Colonial First State has more retiree customers, looks after more retirement savings, and pays more in private pension payments than anyone else. We know retirement, which is why we have partnered with Challenger and CommInsure to deliver annuities via our platforms at the same rates as getting them directly,” Ms Elkins said.

With an increasing focus on addressing ‘longevity’ risk (the risk of outliving retirement savings), advisers are more interested in including annuities in retirement portfolios. Research by Investment Trends[2] shows almost 60 per cent of advisers are using or planning to use annuities in 2015 – more than double the level in 2012.

Ms Elkins said convenient access to guaranteed income stream solutions, like Challenger and CommInsure annuities, makes it easier for retirees and their advisers to arrange regular, stable incomes in retirement.

“This is vitally important for the rapidly growing number of retirees in Australia. Offering annuities via our platforms makes it easier for retirees to lock-in a guaranteed cash flow irrespective of how long they live,” she said.

Recent modelling conducted by Ernst & Young and Colonial First State[3] shows that combinations of an allocated pension and a lifetime annuity in a retirement portfolio can often provide superior outcomes to an allocated pension alone.

“Including annuities alongside account-based pensions has become an increasingly popular approach to retirement portfolio construction and provides a level of longer-term income to address growing issues such as longevity risk and sequencing risk,” Ms Elkins said.