Eric Marais

Artificial intelligence may give investors access to more information and greater processing power than ever before, but it could also amplify herd behaviour and make markets less efficient, according to global contrarian investment manager Orbis Investments.

In its latest whitepaper, New Tools, Old Habits: Investing in the Age of AI, Orbis argues that while technology has transformed how investors access and analyse information, the human behaviours that drive markets haven’t changed.

Eric Marais, Head of Investment Specialists at Orbis Investments, said AI could accelerate those behaviours by allowing investors using similar tools and data to reach the same conclusions faster.

“AI has the potential to be genuinely transformative, and we are embracing it ourselves. But better tools don’t necessarily make better investors,” Mr Marais said.

“If investors are using similar tools trained on similar data, their conclusions may increasingly converge. Instead of making markets more rational, AI might just make the herd move faster.”

Orbis’ research shows that despite decades of improvements in investment technology, the dispersion between the most and least expensive stocks remains close to some of its widest historical extremes – challenging the assumption that better technology and more information will necessarily make markets more efficient.

Getting the technology right isn’t enough

Orbis argues that the key investment question is not whether AI will be transformative, but whether investors are paying the right price for the companies expected to benefit from it.

The whitepaper points to the experience of Zoom during the pandemic. In 2020, the video-conferencing company was briefly worth more than ExxonMobil as lockdowns transformed the way people across the world worked and oil markets collapsed. In the years that followed, Zoom’s shares lost 90% of their value, while ExxonMobil rose more than five-fold.

“The lesson isn’t that the technology was wrong. Zoom was exactly what a suddenly remote world needed,” Mr Marais said.

“The mistake was allowing an irresistible narrative about the future to become detached from what investors were actually paying for it. AI may change the world, but that doesn’t mean every price attached to the AI story will prove justified.”

“The question today isn’t whether AI is real. It’s who ultimately captures the value it creates and what price investors must pay to participate,” Mr Marais said.

The opportunity may be away from the herd

AI is also arriving at a time when global equity markets are increasingly concentrated, with a handful of mega-cap companies dominating headlines and benchmark weights.

Orbis argues this makes independent thinking particularly important. For investors prepared to take genuinely differentiated positions, it sees potentially greater opportunity away from the most crowded parts of the market – including ex-US developed markets and emerging markets, where indices can be less efficient proxies and analyst coverage thinner.

“When everyone is looking in the same place, the competition for an investment insight is naturally much greater,” Mr Marais said.

“The payoff to skill and judgement can be greatest where fewer investors are exercising it. That doesn’t guarantee success, but it can provide a more favourable starting point.”

Independent thinking becomes more valuable

As AI tools become more widely available, Orbis believes the technology itself will become less of an investment edge. Independent thinking will matter more.

Orbis is itself using AI to interrogate more than three decades of proprietary investment research and decision-making data. But investment decisions remain firmly in the hands of its investment professionals.

“When everyone has access to increasingly powerful tools, simply having the technology isn’t an edge,” Mr Marais said.

“AI can make investors more productive, but if everyone has access to similar tools, that advantage quickly becomes table stakes. The enduring edge is the ability to challenge your own conclusions, think independently and recognise when the herd might be wrong.”

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Alexander Euvrard

Self-licensing specialist My Dealer Services (MDS) has written to Treasury asking it to assess the FSC’s recent whitepaper on proposed ASIC industry funding levy changes against what it says is a clear motive to force consolidation of smaller licensees.

In a submission sent to the government body, MDS said it strongly rejected the FSC White Paper’s proposal to lift the fixed licence level component of the ASIC levy from $1,500 to $25,000 (Option A) or $40,000 (Option B) offset by a lower per-adviser fee.

Under this proposal a single adviser practice would face an increase of roughly 600% under Option A and over 950% under Option B while a 300-adviser licensee’s levy would fall by around 23%.

It would mean 15 out of 16 advice licensees, more than half of whom authorise only one or two advisers, would pay more and only 1.5% of licensees who had 100 of more advisers would pay less, MDS Director and Founder Alexander Euvrard and MDS Head of Strategy, Ashley Mahadeea said in the submission.

“Essentially the entire redistribution flows to the 28 licensees at the top. Those licensees, carrying 5,744 advisers or 37.9% of the profession would collectively save in the order of $2.8 million a year under Option A and $9.3 million under Option B.

“That is the transaction at the heart of this proposal: an eight-figure annual transfer from more than 1700 of the smallest advice businesses in the country to a group of large licensees small enough to fit in one (albeit large) boardroom.

“The White Paper’s own modelling assumes that 15-20% of licensees would consolidate or close as a result. That is not an unintended side effect to be managed; it is the design working as intended.

“A levy whose stated modelling anticipates the exit of one in five licensees, overwhelmingly the smallest, is an industry restructuring instrument, not a cost-recovery mechanism and it should be evaluated as such,” Euvrard and Mahadeea said.

“In our view the proposal is not a funding reform. It is a redistribution of regulatory cost away from large licensees and onto small ones, dressed as risk pricing and it would operate as a structural barrier to the self-licensed model at precisely the time that model is delivering strong growth and client outcomes,”

“Many large adviser groups view the rapidly growing self-licensed sector as a competitive threat; this proposal would materially blunt that competition,” they added.

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Many retirees can afford a comfortable retirement – yet hesitate to spend, delay decisions or default to caution.

New research from Allianz Retire+ has identified decision inertia, driven by a powerful fear of commitments perceived as irreversible, as an emerging risk to retirement outcomes for otherwise well-prepared Australians.

Many retirees can afford a comfortable retirement – yet hesitate to spend, delay decisions or default to caution, according to a new white paper released by Allianz Retire+.

The behavioural cost of this inaction is clear across the Australian retirement system. Around 700,000 retirees leave their superannuation in accumulation after retiring, costing individuals up to $136,000, while around half of account-based pension holders withdraw only the minimum required, leading many to live more cautiously than their savings actually demand.

While many financial risks can be managed through diversification and portfolio construction, longevity risk remains fundamentally different. It cannot be diversified away within an individual retirement portfolio.

When retirees lack protection against the risk of outliving their savings, advisers are forced to manage longevity as a probability rather than a certainty, a reality that often drives underspending, heightened caution and lower confidence in retirement.

David Kane, Chief Executive Officer, Allianz Retire+, said advisers face a unique challenge when it comes to longevity risk.

“Longevity is the one major retirement risk advisers can’t meaningfully diversify away. While markets can be modelled and managed over time, traditional asset allocation strategies can’t insure against the risk of outliving your savings.

“Guaranteed lifetime income is not a product preference, it is a structural planning tool that helps advisers discharge their duty of care by securing essential income for life, and in doing so, gives clients the confidence to enjoy the years they can without fearing the years they can’t.”

The paper ‘The two-chapter retirement’ brings together a wide body of evidence spanning behavioural research, Australian and global retirement studies, economic data and adviser practice insights to explain this persistent disconnect. The paper synthesises this evidence into a single, coherent framework that reflects, generally, how retirees may actually think, feel and make decisions.

The ‘Two-Chapter Retirement’ framework highlights how many people experience their retirement journey as two psychologically distinct phases:

• an active, aspirational early chapter they can clearly imagine; and
• a later, more uncertain chapter associated with caution, fear and complexity.

Mr Kane added: “What we see is not the result of financial illiteracy or inadequate savings. These are clients who are well resourced and understand their position and yet are still reluctant to act.

“The constraint is behavioural, and no amount of additional information or projections are likely to help. Instead, advisers need a fresh approach which reframes levels of commitment and stresses the exit ramps in any retirement income strategy.

“The retirement system is getting more complicated, and many people aren’t aware of products that can give them guaranteed income. Combined with natural hesitation about large financial decisions, this is leaving many retirees unclear on their spending capacity and holding them back from plans that could help them enjoy the retirement they’ve worked hard for.”

These same patterns have played out consistently across decades of experience for Allianz in the United States at greater scale. In a 2024 survey by the Allianz Centre for the Future of Retirement, 85% of respondents said they find it easier to spend when they know their basic needs are covered, with 68% saying that the fear of unexpected expenses prevents them from wanting to spend money.

The white paper outlines the benefits of guaranteed income solutions, and the positive impacts for retirees when their advisers include these products as an option in their planning discussions.

“New-era retirement income solutions offer flexible access to capital and growth with downside protection not seen in older-style annuities.” Mr Kane said.

“Advisers who can help their clients distinguish between what is genuinely irreversible and what merely feels that way will materially shift their clients’ willingness to act, and will ultimately improve both their clients’ financial and emotional security.”

The ‘Two-Chapter Retirement’ framework represents a new paradigm for retirement planning. Recognising this two-chapter mindset is essential because it shapes how clients respond to advice, perceive risk and evaluate strategies from the outset. Viewing retirement planning through this lens allows advisers to better support their clients as they balance the desire to live well today with the need to secure tomorrow.

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Craig Brooke

KeyInvest, a member-owned mutual society, has released a new whitepaper on Division 296, putting a spotlight on how adviser thinking is shifting from understanding the policy to managing its long-term impact, with modelling showing a $5 million super balance could generate more than $200,000 in additional tax over a decade.

The paper, ‘Division 296 and the end of unconstrained super’, unpacks the legislated changes and what they mean in practice, particularly for clients approaching or exceeding key balance thresholds.

KeyInvest CEO, Craig Brooke says, “The conversation has moved beyond the detail of the policy itself, and towards how advisers are responding. Most advisers now understand how Division 296 works, but the challenge is what do they do about it.”

The whitepaper points to a growing need for earlier planning, as balances trend higher and more clients move towards the $3 million threshold.

“What we’re seeing is a shift in timing, rather than waiting until a client breaches the threshold. Advisers are starting to plan for it well in advance, which changes the structure of advice.”

A key theme in the paper is the increasing importance of asset location, as marginal tax outcomes within superannuation become less consistent at higher balance levels.

“Super remains central, but it’s no longer the default destination for all long-term capital, and this is what’s leading to a more deliberate decision about what sits inside and outside of superannuation.”

The analysis also displays how the tax efficiency of superannuation narrows at higher balances, particularly once the additional tax layers apply. Over time, this is expected to influence greater interest in complementary structures that can sit alongside superannuation.

Investment bonds are increasingly part of that conversation as clients shift their priorities to intergenerational planning and tax certainty.

The whitepaper forms part of KeyInvest’s ongoing work with advisers, providing practical guidance as the impact of Division 296 becomes a more active consideration in client strategies.

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Debby Blakey

HESTA has launched a new white paper that highlights a significant blind spot in Australia’s retirement system.

The white paper – Make the move: guiding members to tax-free retirement – is a continuation of research insights released last month, providing further insight on how eligible Australians are missing out on billions of dollars in tax-free retirement savings.

It reveals for the first time that, collectively, eligible Australians likely missed out on up to $13.5 billion in tax-free investment returns between 2017 and 2025 simply by not transitioning their super into the retirement phase when they became eligible.

The white paper points to a simple solution: to let funds act in their members’ best interests at retirement by proactively transitioning eligible members into the tax-free phase of superannuation with the ability for members to opt out.

The research^[1], commissioned by HESTA and conducted by Laneway Analytics, analysed diverse eligible groups of members and found that every member group is expected to benefit from transitioning to a retirement product when they become eligible – regardless of their balance, gender, homeownership status, or whether they have a partner.

Current retirement product take-up rates by eligible members are low – 30% at HESTA and 45% system wide. This is despite member education efforts and targeted communications within the limitations of the current advice settings. The solution put forward could deliver Australians up to 12% more money in retirement compared to those who delay transition by four years.

“Retirement should be a time when Australians can enjoy the rewards of a lifetime of work. Yet too many Australians are not making the move from saving for retirement to actually living in retirement – and the cost of that inaction is significant,” HESTA CEO Debby Blakey said.

“Without reform, the problem will only grow. We need system-level change to make it easier for people to access tax-free income in retirement.”

The research found that in FY2025 alone, 1.8 million Australians remained in accumulation phase despite being eligible to switch, collectively forgoing $2.5 billion in a single year. By 2030, nearly 3 million Australians are projected to be missing out on $5.5 billion annually.

HESTA is continuing to call for reform, advocating for a default with member opt-out, that would transition eligible members to retirement phase products at a certain age when they’re no longer making contributions.

The white paper highlights how women disproportionately carry the cost of not transitioning to a retirement phase option – being the least likely to act under the current voluntary model. Female HESTA members have a take-up rate of just 29%.

“Women who have spent their careers caring for others often retire with more modest balances – and they are precisely the members least likely to make this transition on their own,” Ms Blakey said.

The research suggests transitioning to a retirement income stream upon eligibility could boost a member’s total retirement income by up to 12% depending on their circumstances, compared to those who delay by four years. This figure aligns with the median duration HESTA members remain eligible but do not transition. Such delays cost retirees both in the near-term and in the years ahead as the impact compounds over time.

“The research finds every eligible member cohort analysed is better off when they have access to a retirement phase option rather than staying in accumulation,” Ms Blakey said.

“That’s why we’re calling for a well-designed default mechanism that would seek to ensure no Australian is left behind simply because the system failed to guide them.”

HESTA’s white paper Make the move: guiding members to tax-free retirement was discussed at a roundtable event in Melbourne last week by sector leaders from funds, industry bodies, institutes and think tanks.

Read the paper.

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China is already at the forefront of humanoid development.

Key takeaways

• Building on its success in electric vehicles (EVs), China is now shifting its attention towards humanoid robotics as the next frontier for technological leadership.
• This transition draws on deep parallels between the supply chains of humanoids and EVs, allowing China to leverage its expertise in batteries, motors and large-scale manufacturing.
• While Chinese original equipment manufacturers (OEMs) are pursuing task-specific industrial humanoids, Western developers are prioritising high-end, general-purpose models.

China’s rise to dominance in EVs, from batteries to motors to mass production, is a testament to the nation’s success in evolving an innovative endeavour into a full-fledged industry. This achievement has set the stage for China’s ambitions in the humanoid robotics sector, sparking industry-wide debate on whether the same formula can be applied?

At the most recent CES 2026 – one of the most influential technology exhibitions of the year – many Chinese companies seized the opportunity to unveil their latest humanoids. Humanoids were, in fact, a standout theme at this year’s event, with 38 exhibitors showcasing humanoid robotics. Of these, 21 hailed from China, underscoring the country’s intensifying focus on this emerging domain. US-based Boston Dynamics made headlines by presenting the first commercial, all‑electric iteration of its Atlas humanoid. The Atlas demonstrated remarkably fluid movement, fully rotational joints and could handle payloads of up to 50 kilograms, signalling a shift from laboratory testing to practical industrial applications. In comparison, Chinese exhibitors revealed a variety of taskoriented humanoids developed for specific roles within factories and warehouses, such as robots designed for material handling, sorting and inspection tasks. These examples illustrate both the push for general-purpose adaptability, as seen with Atlas, and the targeted, pragmatic approach favoured by Chinese manufacturers.

Promise or paradox?

Humanoids are machines designed to move and act like humans. They are envisioned for a range of uses but are currently being piloted in factories and warehouses to do labour-intensive and repetitive tasks like moving materials, sorting goods, or performing inspections. Longer-term, humanoids could even assist in health care and elder care, perform domestic chores alongside humans and tackle labour shortages as the working population shrinks.

Bold visions come from bold thinkers with bold numbers. Tesla CEO Elon Musk has mused that by 2040 there will be more humanoids than people^[1], which implies a massive trillion-dollar global opportunity. Meanwhile, Nvidia’s CEO Jensen Huang proclaimed “the ChatGPT moment” for general robotics is just around the corner, alluding to a scenario where rapid AI development and proliferation could soon drive a similar breakthrough in the field of robotics.

More conservative projections estimate that the humanoid robotics market could reach approximately US$51 billion by 2035, contingent on a substantial decrease in robot prices from current levels.^[2]

While estimates may differ, what is clear is that investments into humanoids are increasing exponentially. Global funding of humanoid startups was almost inconsequential at the turn of the decade but has since gone on to reach US$1.2 billion in 2024. DroidUp, Robot Era and X Square Robot are just some of the many humanoid companies to have been founded in China since 2020. Notably, a number of these start-ups have been spun out of universities or maintain close affiliations with academic institutions and many have secured funding from major corporations such as Alibaba Cloud, Tencent and Huawei.

Challenges facing humanoid deployment

Key tech hurdles: Although advancements in AI have accelerated progress, key hurdles remain for humanoids to be adopted widely.

Training data and robot intelligence: Humanoids must rely on vast amounts of real-world data to learn through trial, error or imitation. Although simulated data can be useful, the gap between virtual and real-world conditions means many robots still struggle in real-life scenarios.

Software and control constraints: Most existing humanoids are semi-autonomous, carrying out preset tasks under human or system supervision. Achieving full autonomy requires advances in real-time perception, planning and safe learning.

Power and battery life: Humanoids generally weigh between 50 and 70 kg and operate only for one to two hours per charge. Batteries continue to be heavy and costly, which affects practical deployment.

Mechanical reliability and design trade-offs: Walking and object manipulation require motors and joints that can withstand various operational demands. Early models are prone to overheating and mechanical wear.

Expensive price tags: An advanced unit such as Boston Dynamics’ Atlas has been reported to cost up to US$150,000. Humanoids built for specific tasks also typically cost several tens of thousands of dollars per unit.

Considering the significant investments and high costs associated with humanoids, a critical question emerges: what must happen for humanoids to become financially viable to kickstart a self-reinforcing flywheel that can lead to the advancement and proliferation of humanoids?

The key takeaway is clear: scale is everything. For the humanoid industry to break even, they will likely need to achieve annual sales of at least 100,000 units, mirroring the threshold that recently brought cobots close to profitability. To move beyond breakeven and enjoy the solid profitability seen in the industrial robot market, which operates at over 500,000 units a year, humanoids would have to match these far higher volumes.

Given that current humanoid shipments are well below these figures, it would be at least five years before the industry even approaches breakeven levels, with true profitability remaining a longer-term goal. That said, this should be seen as a feature rather than a flaw. It mirrors the early stages of previous major technological shifts, where progress depended on continued innovation, the development of practical use cases (and data), growing demand and, ultimately, profitability.

“Bots” at a glance

Industrial robots

• Design: Large, rigid robotic arms or gantry systems.
• Purpose: High-volume, highspeed automation in manufacturing environments.
• Common applications: Coating, chassis and engine assembly, welding.

 Cobots

• Design: Typically arm-like, smaller than industrial robots, designed for safe interaction with humans.
• Purpose: Work alongside humans in shared spaces without heavy safety barriers.
• Common applications: Food packaging, component sorting, machine tending, quality inspection.

Humanoids: EV 2.0?

Despite the nascency of the industry, the Chinese government has identified humanoids as a strategic priority. In January 2024, China’s Ministry of Industry and Information Technology unveiled the ‘Guidelines for the Innovative Development of Humanoid Robots’, setting out a framework to foster robotic innovation. This strategic focus is further demonstrated by the nation’s organisation of high-profile events, such as the World Humanoid Robot Games, and its active encouragement for state-owned enterprises (SOEs) to engage in pilot projects and facilitate data collection. This echoes with China’s strategy for EVs, which integrated policy coordination, capital investment and industrial development.

Another reason why China’s dominance in EVs could potentially translate into humanoids is the significant overlap in the supply chain of the two products. Both rely on electric motors, power electronics, batteries and sensors, areas where China has built formidable capacity and know-how. For example, the lightweight electric actuators that move a robot’s limbs are cousins to EV drivetrain motors and high-density battery packs for robots draw directly on advances from EVs.

As a result, many Chinese auto suppliers are repurposing their products for humanoids. Companies like Zhejiang Sanhua Intelligent Control and Ningbo Tuopu Group, originally making EV thermal and chassis parts, are reportedly assembling joint modules for Tesla’s Optimus humanoid. 8 China’s extensive electronics and automotive ecosystem (motors, gear reducers, lithium batteries, camera modules, etc.) means much of the humanoid “body” hardware can be sourced locally and at scale.

The east vs. the west

As more companies are showcasing their humanoid prototypes globally, a clear emerging theme is the divergence between Eastern and Western development philosophies. Both are racing toward similar goals, but they have chosen different routes.

Conclusion: A shifting global landscape

In summary, China’s momentum in the humanoid sector is underpinned by its formidable strengths in innovation and execution, evident by the success in its electric vehicle dominance: an extensive, skilled manufacturing workforce, a focus on cost efficiency, robust government backing, an increasing focus on technology innovation and the capacity for rapid prototyping as well as iteration. Conversely, Western initiatives are distinguished by leading-edge AI research, advanced systems integration and software development. These complementary capabilities ensure that both regions will play critical, interdependent roles in shaping the humanoid robotics market.

Instead of a simple rivalry, the future could point towards a complex, globally interconnected value chain. It is conceivable that Chinese factories could one day produce hundreds of thousands of humanoid units, each powered by an AI operating system licensed from the US, with a blend of Chinese actuators and American-designed chips. Investors and stakeholders should pay close attention to trends in hardware commoditisation, where China holds a competitive advantage and software or intellectual property development, where Western firms excel.

However, this dynamic could shift significantly if China manages to close the gap in software and services. Recent progress in generative AI, exemplified by initiatives like DeepSeek, coupled with the rise of domestic AI chip production and China’s proven track record of innovation in the EV sector, indicate the potential for the country to extend its influence well beyond manufacturing.

Given these factors, it is therefore also essential to consider a range of scenarios in which China may emerge as a dominant force across both hardware and software segments of the humanoid robotics industry. This scenario analysis will help investors and industry leaders anticipate future developments and strategically position themselves within an evolving global landscape.

Given how early humanoid development still is, it remains anyone’s guess how the industry will evolve over the long term. But one thing is clear: China is ready and already at the forefront of humanoid development. With its dominance in hardware manufacturing and continued investments in software and AI, China has the potential to replicate its success in EVs with humanoids.

———— 

Notes:
[1] FII8 Executive Report 2024. Source: FII Institute
[2] Humanoid Robots 2025 Report. Source: Yole Group
[3] Data accessed on 31 October 2025. Source: Standard Bots
[4] Estimates as at 12 October 2025. Source: Capital Group
[5] World Robotics 2025 Report published on 25 September 2025. Source: International Federation of Robotics
[6] Data as at 8 September 2024. Based on 2024 shipment volume projections. Source: Yano Research Institute
[7] Based on 2025 estimates from Humanoid Robots 2025 Report. Source: Yole Group
[8] Data as at 4 March 2025. Source: Yicai Global

Statements attributed to an individual represent the opinions of that individual as of the date published and may not necessarily reflect the view of Capital Group or its affiliates. This communication is intended for the internal and confidential use of the recipient and not for onward transmission to any other third party. This communication is of a general nature, and not intended to provide investment, tax or other advice, or to be a solicitation to buy or sell any securities. All information is as at the date indicated and attributed to Capital Group unless otherwise stated. While Capital Group uses reasonable efforts to obtain information from third-party sources that it believes to be accurate, this cannot be guaranteed. In Australia, this communication is issued by Capital Group Investment Management Limited (ACN 164 174 501AFSL No. 443 118), a member of Capital Group, located at Suite 4201, Level 42 Gateway, 1 Macquarie Place, Sydney, NSW 2000 Australia. All Capital Group trademarks are owned by The Capital Group Companies, Inc. or an affiliated company. All other company names mentioned are the property of their respective companies. © 2026 Capital Group. All rights reserved.

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Dan Monheit

Reframing retirement advice and simplifying frameworks is key to addressing behavioural biases in retirement, increasing engagement, and improving retirement outcomes for every Australian, according to a whitepaper by Industry Fund Services, developed in collaboration with Challenger.

The research identified five behavioural biases that impact the complex, long-term decision making needed in retirement planning. These included: choice paradox and framing, being overwhelmed by options and complexity; temporal discounting, focusing on immediate gains over long-term security; and loss aversion, feeling losses, such as lack of flexibility, twice as much as gains.

Commenting on the findings, Behavioural Scientist, Dan Monheit, said addressing behavioural biases is critical to helping overcome complexity and confusion to better engage retirees in the advice process.

“Financial advisers cannot avoid influencing preferences. Every aspect of an interaction, from the order options are presented to the way risks and rewards are framed, shapes outcomes,” Mr Monheit said.

“This presents a significant opportunity to remove complexity and improve the advice experience. By framing choices in a way that aligns with people’s underlying preferences – not in response to overwhelming information – they’re more likely to make confident, informed decisions.

“It’s time to embrace the intersection of psychology and economics in advice.”

Choice architecture in quality advice

Choice architecture helps address behavioural biases by structuring options more effectively. This approach is vital for retirement income planning, where retirees must weigh trade-offs between maximising income, accessing funds, and maintaining sustainability.

Advisers can embrace the role of Choice Architects by using simple language and visuals, narrowing decision-making, reframing discussions to focus on benefits, and balancing long-term and immediate considerations.

Adrian Gervasoni, Executive Manager of Advice Services at Industry Fund Services, said advisers play an increasingly important role in retirement, but must be aware of how biases impact the process.

“Retirement planning is about more than just financial modelling – it’s about helping retirees make confident decisions in the face of uncertainty,” Mr Gervasoni said.

“Through a diligent approach to choice architecture we can put the retiree in the driver’s seat. We want to move the conversation from product features and benefits to focus on consumer preferences, such as certainty and flexibility. Ultimately, the goal is to deliver greater confidence when entering into retirement.”

Default bias, instinctively choosing more familiar options, is another bias that often arises in retirement planning and can impact both the adviser and retiree.

“Advice is a human-centric process, filled with emotions and biases that influence the options we present and the way information is understood. Being aware of default bias, and shifting the focus from what is simply familiar, like account-based pensions, can help deliver retirement income solutions that are sustainable, secure, and truly address long-term income concerns.”

Smarter retirement pathways

Through choice architecture, smarter, simpler retirement pathways can be designed and delivered. The research led to three distinct retirement strategies models that can deliver on the shared needs of those entering retirement:

1. Certainty: Balances flexibility and certainty, while prioritising long-term income to give retirees confidence their money will last, for life. The research shows a 70% allocation to account-based pensions (ABPs) and 30% to lifetime income products, such as lifetime annuities, can deliver flexibility, offer the highest portfolio value for estate planning, and provide partial asset test exemption for the Age Pension assessment.
2. Balance: Designed for retirees seeking greater flexibility and access to capital, who may have less concern about income longevity. The modelling shows an 85% allocation to ABPs and 15% to lifetime income products, such as annuities, means there is still modest income certainty and Age Pension assessment benefits.
3. Flexibility: This prioritises complete flexibility with a 100% allocation to ABPs. The trade-off can be a lack of income certainty and greater longevity risk, which may impact confidence to spend and estate outcomes.

Commenting on the model strategies, Adrian Aardoom, Head of Retirement Partnerships at Challenger, said these models help to remove complexity, simplify decision making, and deliver on core retirement needs, while ensuring trade-offs are easily understood and considered.

“There is mounting pressure on the financial services industry to better address the needs of Australians when it comes to their retirement planning and income demands,” Mr Aardoom said.

“Through an understanding of behavioural biases, combined with Challenger’s deep expertise in retirement income, we have developed a simplified, practical framework that members can easily understand and advisers can easily embed.

“With a record number of Australians entering retirement, we have an unprecedented opportunity to help more retirees navigate their golden years with confidence – delivering income certainty without the added complexity.”

The whitepaper aims to give superfunds, advisers, and the broader industry, the tools and insights they need to have better retirement discussions and, ultimately, deliver better retirement outcomes for every Australian.

Read the whitepaper.

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Kristine Brooks

Australian financial advisers are turning to AI to simplify and sharpen their client communications during times of market turbulence.

This is one of the headline findings of Milford’s newly released research paper, Calm over Calamity.

Based on extensive interviews with investment focused advisers from around Australia, the paper identified 15 best practice communication strategies being used to help keep clients calm, connected, and disciplined during market drawdowns.

The use of AI to filter and distil fund manager updates and economic commentary down into clear, tailored client messaging, is the latest way innovative advisers and practices are applying AI to high value, sensitive client interactions.

“When portfolios are turning red and media headlines are amplifying bad news, advisers can find themselves under pressure to keep clients calm and focused. But at the same time, they can find themselves dealing with a deluge of research reports, market updates, and economic commentary, much of it very jargon heavy,” said Kristine Brooks, Chief Country Officer for Milford Australia.

“Collating and simplifying all this complex data into client friendly talking points can be a daunting task without specialised expert assistance.

“The more tech savvy practices are recognising the power of AI to handle such a vital task without the need for expensive external support,” Brooks said.

Along with 14 other best practice communication insights, Calm over Calamity highlights how leading advisers have become behavioural coaches and storytellers more than portfolio managers, using an extensive strategy toolkit to filter out market noise and prevent knee-jerk, emotional, wealth destroying client reactions to market events.

“Advisers are now using AI to cut through complexity and deliver clarity, driving not just more efficiency but ultimately better client outcomes,” said Brooks.

Read the paper.

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The nationally representative findings detailed in the Protecting Australia’s Retirement Savings in a Digital World whitepaper explores consumer sentiment following recent cyber incidents.

The research calls for an industry-wide uplift in digital identity and fraud protection capabilities after the 2025 Cybersecurity Ventures Cybercrime Report found cybercrime is a booming global industry, projected to hit $10.5 trillion annually in 2025. Australia’s superannuation sector is a prime target with total assets now more than $4.1 trillion in the March quarter of this year.

Among other standout results from the new whitepaper:

• Confidence in superannuation fund security was rated just 3 out 5
• 61% of Australians say stronger security features would increase their loyalty to a fund
• 69% already use and are familiar with fingerprint or facial recognition tools
• 91% expect verification for high-risk and major transactions
• 64% say they now check their super more than once per month

The whitepaper also outlines how MUFG Retirement Solutions is responding – from piloting biometric eKYC onboarding and exploring verifiable credentials with leading innovators, to expanding its ALERT fraud detection system, which actively protects more than 30 million accounts and recently prevented an estimated $21 million in attempted fraud.

These tools are part of the broader MUFG Retirement Solutions prisma Security Platform – a suite of products and services delivering world-class security and risk management. Built to protect member data and assets, prisma combines advanced technology, specialist expertise, real‑time anti‑fraud tools, identity verification, access controls, and threat monitoring – all supported by ISO 27001 certification and global best practices.

Frank Lombardo, CEO of MUFG Retirement Solutions (ANZ), said: “Trust is everything in superannuation, and the growing cybersecurity threat is putting that trust to the test. Members now expect the highest levels of protection and a seamless experience from their service providers – and our research shows that if they don’t get it, they’ll consider moving funds.

“MUFG Retirement Solutions is investing in next‑generation identity and fraud prevention tools so our clients can give their members confidence that their retirement savings are safe, without compromising on convenience.”

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Claire Smith

In a new white paper Schroders challenges conventional thinking about risk in private equity, urging financial advisers to reconsider how they define and pursue investment safety.

While many investors gravitate toward low-risk, low-volatility strategies, particularly in today’s unpredictable market environment, Schroders argues that this mindset may inadvertently limit long-term returns.

In today’s complex and uncertain investment landscape, it’s tempting to chase safety in low risk and low volatility for investors. But history and data show that avoiding risk does not always lead to better returns. In fact, the opposite can be true.

Schroder’s believe the most compelling opportunities lie not in the well-trodden paths of large-cap investing, but in the overlooked and undercapitalised small and mid-cap private equity market. This segment offers outsized potential for value creation when approached with discipline, expertise, and a rigorous selection process.

For investors seeking long-term value over short-term comfort, fortune truly favours the small, and the brave.

Read the whitepaper by Vahit Alili Senior Investment Director and Claire Smith Head of Business Development Australia, Private Markets.

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