New research by Rice Warner Actuaries outlines the key challenges for the superannuation industry over the next decade, including a shift to post-retirement assets.
According to new data by Rice Warner Actuaries, superannuation assets are set to grow to around $3.3 trillion by 2026, while the number of super funds in Australia will drop by 48 per cent in the next five years.*
Commenting on the figures, Michael Rice, Managing Director of Rice Warner, said, “The industry faces an unprecedented number of challenges over the next few years. Funds need to position themselves to be able to address these successfully while still focusing on delivering the best retirement outcomes possible to members – hence our prediction that the number of funds will continue to reduce substantially.”
One trend that has had a major impact on the superannuation industry in recent years is the growth of self-managed super funds (SMSF). Rice Warner predicts that the flow of assets to the SMSF segment will continue, largely driven by advisers and accountants, with total market share by assets to remain stable at around 30 per cent of the market.
Rice Warner also expects that with the baby boomer generation retiring, post retirement assets will increase to 42 per cent of all superannuation assets by 2026, compared to 30 per cent at 30 June 2011. Industry fund market share of post-retirement assets is predicted to triple from 5.1 per cent at 30 June 2011 to 16.5 per cent by 2026.
Alun Stevens, Principal of Rice Warner, said, “The market has reached a turning point against the backdrop of unparalleled legislative changes, market turmoil and the shift to SMSFs. Simultaneously, there is an accelerating movement of members and assets into the post retirement phase. In response, we expect significant product development and realignment of servicing models.”
For more information, visit www.ricewarner.com.au
*Includes Corporate, Industry Fund, Public Sector and Commercial Funds.