CommInsure, CFS bolster retirement offering

Boost in planners using CommInsure annuities and CFS platforms expected.


By Julie May

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The introduction of annuities on Colonial First State’s (CFS) investment platforms was likely to see a spike in planners using CommInsure annuities and the CFS FirstWrap and First Choice platforms, CommInsure head of annuities George Lytas said last week.

The two Commonwealth Bank of Australia-owned businesses had been working together, with retirement income solutions an increasingly important factor given the ageing population and the government’s “2015 Intergenerational Report”, which had projected some dire statistics, Lytas said.

“CommInsure has many direct relationships with financial planners using our annuities, and we believe the adoption of these retirement income guaranteed-style products by CFS platforms will boost the number of relationships we have with those in the financial planning community, and at the same time give CFS platforms a competitive edge,” he told financialobserver.

CFS announced last October that CommInsure and Challenger annuities would be available on FirstWrap and First Choice in mid-2015 in what it called an Australian first.

Lytas said the annuities would launch on the platform “shortly” but gave no specific date.

“It’s a great opportunity for advisers and their clients to access annuities at the same rate, and with the added benefit of consolidated reporting,” he said.

When asked if CommInsure would offer its annuities on other platforms in the market, Lytas said the focus for now was CFS, but it was open to the possibility in future.

“Plan For Life research has shown funds under management in annuities is expected to increase from $11 billion to $23 billion by 2024, so it’s definitely a space that we’re glad to be operating in,” he said.

Lytas also cited Investment Trends statistics released in April that indicated advisers’ intentions to use annuities had risen to 59 per cent in 2015.

“The interest in annuities is being pushed by a need for certainty around retirement solutions and products that consider increased life expectancies, longevity risk and sequencing risk,” he said.

He acknowledged that CommInsure and Challenger were the two most active groups in the annuities space right now, but would not comment on why other institutions lacked presence.

“Everyone’s looking at what solutions they can offer, but it really comes down to strategy and annuities being a capital-intensive product, which also makes it harder for smaller players,” he said.

“We’ll definitely see more innovation going forward and more opportunities for people to enter the market through partnerships, in addition to greater product development, particularly if some of the current regulatory impediments are removed.”

Lytas also said the CFS retail distribution team had appointed three retirement business development managers to educate advisers about platforms, annuities and account-based pensions.

Joining from Perpetual was Simon Felice to cover New South Wales, Vijay Mathew from Challenger for Queensland, and internal recruit Stefanie Bond for Victoria and Tasmania.

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