On Tuesday, a Challenger Limited trading update informed the market that it has broadened its distribution footprint in the financial advice sector.
“Challenger has announced plans to further expand distribution by making its full range of annuities available on the fast-growing specialist Netwealth platform,” Challenger CEO Brian Benari said.
“This is the fifth retail platform to launch Challenger annuities, demonstrating strong demand for advisers to be able to easily include annuities in their clients’ portfolios.
“Our annuity relationship with Netwealth means Challenger annuities will soon be available on platforms used by more than 70 per cent of financial advisers in Australia. Many platforms and super funds are now making lifetime income solutions available to their customers, demonstrating the importance of providing options that create secure and stable income for retirees.”
The announcement follows the launch of Challenger annuities on BT Panorama in August 2018 and recent plans to make Challenger annuities available via HUB24.
Challenger announced this week that it has grown its AUM to $81 billion. The group recorded its second-highest quarterly annuity sales with a total of $1.2 billion over the three-months, up 7 per cent.
“Total life book growth for the quarter was $425 million or 3.1 per cent, reflecting both higher Australian annuity sales and the benefit of a lower maturity rate compared to the prior comparable period,” Mr Benari said.
“Continued growth in annuity sales reflects strong demand for secure income from the growing number of retirees with increasing retirement savings. Annuity sales are also benefiting from Challenger’s expanded distribution reach.”
Mmmm….using annuities at the bottom of the interest rate cycle. Not likely to be a smart move. we can understand that these products may be useful at some point and even really useful in time, but we’re probably a few years away from that. Meanwhile, clients won’t enjoy the experience of being locked-in at the worst possible time. Let’s hope advisers are aware of the timing issues and that the push for annuities (driven by the failure of other products/services) doesn’t get too much leverage too soon.
G’day Phil. The increase is due to the current Lifetime Annuity Age Pension concessions being removed July 1st 2019. Have a look at it, you might find some real benefits for your retiree. Good Luck.