In brief
Set up for failure
Any federal government move on superannuation risks setting the retirement system up for failure, national accounting firm Chan & Naylor warns. A $1 million pension fund in today's money will need to be at least $2.5 million in 30 years' time, it says. "Australians are going to need more retirement income and the government of the day is doing surprisingly little to help," Chan & Naylor director Ken Raiss says.
BONDS
DIY explosion
Australia's retail bond market is seeing a strong start to 2013, with companies queueing to borrow record amounts. Research firm East & Partners estimates as much as $17 billion could be raised. Helping demand is a massive rise in the number of Australians managing their own superannuation funds. They now account for $418 billion of the $1.4 trillion superannuation industry, an increase of more than 30 per cent in five years.
INVESTMENT SCAMS
Chinese unchecked
Thousands of retail investors in the Chinese city of Tianjin say they were tricked out of more than $500 million by sellers of illegal wealth-management products. Scam private equity businesses mushroomed in China after a government drive to promote the industry in 2009, leading to a flood of licences for new businesses being issued without proper regulation.
AGENCIES
Frequently Asked Questions about this Article…
Chan & Naylor warned that any federal government move on superannuation risks setting Australia’s retirement system up for failure. The firm’s director Ken Raiss said Australians will need more retirement income and that the government is doing surprisingly little to help.
The article cites Chan & Naylor’s estimate that a $1 million pension in today’s money would need to be at least $2.5 million in 30 years’ time to provide a comparable standard of retirement income.
The warning suggests that Australians may need to aim for higher retirement savings and income than many expect, because projected needs could rise substantially over time and the article notes limited government action to address the gap.
Research firm East & Partners says companies are queueing to borrow record amounts and estimates as much as $17 billion could be raised. The surge in demand is supported by more Australians managing their own super funds and looking for fixed-income options.
DIY super funds now account for $418 billion of the $1.4 trillion superannuation industry — a rise of more than 30% over five years, according to the article.
The article links stronger retail bond demand to the massive rise in Australians managing their own super funds; DIY investors are a growing customer base for corporate retail bonds as they seek investments for retirement portfolios.
Thousands of retail investors in Tianjin were reportedly tricked out of more than $500 million by sellers of illegal wealth‑management products. The article says scam private-equity businesses mushroomed after a 2009 government drive to promote the industry, which led to a flood of licences being issued without proper regulation.
The Tianjin example in the article illustrates how rapid industry expansion without proper regulation can create opportunities for fraudulent wealth‑management businesses and large investor losses, underscoring the importance of regulatory oversight for protecting retail investors.
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