The 2015 Retirement Planner Report found that during the year to October 2015, financial planners placed only 16 per cent of their new retiree client flows into cash and term deposits, down from 22 per cent in the previous study.
"To continue being seen as adding value to their pre-retiree and retiree clients, especially in this high-volatility and low-interest rate environment, financial planners are reducing their flows into safe haven investments such as cash and term deposits in favour of more sophisticated products," said Recep III Peker, Investment Trends' head of research for wealth management.
"Annuities, diversified funds and income funds will continue to be the winners as planners seek higher-yielding, diversified investments".
The number of planners advising on annuities has grown to 41 per cent in the 12 months to December 2015, up from 38 per cent in 2014 and 32 per cent in 2013.
Mr Peker credits Challenger for the product's growth in popularity.
"Planners are becoming proficient in recommending annuities, with more finding them easy to understand and use. Those who explain annuities to clients typically spend only 14 minutes doing so, versus 17 minutes taken to explain managed funds," he said.
"Client awareness of the Challenger Annuities brand has also contributed significantly to planners' ability to recommend annuities, helping to grow the market."
At the same time, the report shows that 84 per cent of advisers are looking for assistance from product providers to better services pre-retirees and retirees clients, up from 82 per cent in 2014.
"Having the right products is important, but these need to be backed with interactive tools and calculators that planners can use alongside their clients," Mr Peker said.
The top four platforms by planner satisfaction with pre-retiree and retiree capabilities are CFS FirstChoice, Macquarie Wrap, CFS FirstWrap and Asgard eWRAP, the report said.
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