Citing signals of economic transition and diversified benefits, Amundi recommends a significant portfolio allocation to gold following its +30 per cent surge since 2023. Investor Strategy News
Australia’s biggest super funds disagree on what the new Your Future, Your Super performance test should look like, but they both think the consequences for failure should be just as weighty – and apply to everybody equally.
Lifecycle strategies come with a cost – Frontier
With the ubiquity of MySuper default options, many funds have attempted to provide a more tailored retirement solution to members through the adoption of so-called ‘lifecycle’ strategies. But, a new paper by Frontier Advisors, warns that members may retire with less as a result.
The paper, co-authored by David Carruthers, a principal consultant and head of member solutions at Frontier, says that while a lifecycle strategy provides an element of protection against sequencing risk in a member’s approach to retirement, that comes at a cost of a likely lower balance at retirement.
The paper says that many super funds seem to have made the decision that this is a price worth paying. But, have they canvassed member opinions? Do members know what they may be giving up/
The paper says that it is hoped that funds completed some analysis of underlying membership trends such as:
- engagement rates
- historic switching activity
- choices at retirement, such as annuities or account-based pensions, and
- cash flow trends in retirement.
“While well intentioned, defaulting members into a lifecycle strategy may perpetuate this low level of engagement,” the paper says. “There is the danger that adopting a lifecycle strategy is seen to some extent as job done for the fund with no further need to attempt to regularly engage with members and check that a lifestyle strategy is still in their best interests.”
– G.B.
