Industry funds join the ranks of product manufacturers
The degree to which the relationship between industry superannuation funds and financial advisers has changed is being demonstrated by the fund promoting their products to advisers.
The latest to do so is HostPlus which has been actively promoting its CPIplus pension investment option to financial advisers.
The promotional material being sent to financial advisers places the funds clearly among the ranks of retirement income product manufacturers alongside the likes of Challenger and Perpetual.
In an e-mail campaign directly aimed at advisers, HostPlus is promoting CPIplus as an innovation that advisers can safely discuss with clients.
“As an Adviser, you know that finding the right balance between risk and return in retirement is one way to help your clients achieve their financial goals,” the HostPlus e-mail says before stating that “clients may want to grow their fund through investment returns but may be uncertain about taking on too much risk. At the same time, they may want access to their money when it suits them”.
It then describes CPIplus as “an innovative pension investment option that aims to provide returns that are more consistent and less volatile than those generally derived from growth assets such as shares”.
The e-mail says the CPIplus investment strategy is designed “to address some concerns your pension clients may have around investment risks and inflation by setting pre-determined returns above ConsumerPrice Incex, therefore aiming to reduce the impact of inflation on the real value of returns”.
The HostPlus material hit adviser in-boxes just days after AustralianSuper and major life insurer, TAL, announced a partnership to develop a lifetime income product to be launched next year.
So from what I can gather the Balanced Fund investments are effectively down side protected by the Accumulation Balanced investors.
When we hit a poor market result then the Accumulators are Paying insurance for the Retirees.
Nothing like a good bit of cross subsidised investment risk hey.
How is that in the Best interest of Accumulators ?
Growth Investments that have no Down side risk.
What could possible go wrong ? So said those Capital Protected Investments pre GFC
Just read the PDS. Hostplus balanced has done better than CPI+ over time so I expect the downside risk to pensioers is giving up a better return they get from balanced for the known CPI+ return?
Tosh.
Past performance is not indicative of future performance.
The last time I sent in a signed client request to ask questions, the Hostplus retention team immediately rang the client and offered their own internal advice team. The client said “I don’t think that is really ethical and I told them.” I suggest any Adviser that uses Hostplus is dancing with the devil.