Speaking to InvestorDaily, a spokesperson for Challenger said the relationship with CFS will “hopefully be the first of many”, with a second announcement expected within a fortnight.
“This isn’t like getting, say, another long equities fund on a platform,” the spokesperson said.
“It’s a big deal because annuities are only purchased through advisers, not directly, and most advisers’ clients put all their investments on-platform,” she said.
This fact makes the impressive growth in annuity sales since 2009 “all the more extraordinary”, said the spokesperson.
“Getting annuities onto platforms could potentially drive more sales than did the GFC and the retirement of the baby boomers,” she said.
CFS general manager for advocacy and retirement Nicolette Rubinstein told InvestorDaily the decision to bring annuities on-platform has been in the pipeline for “about 18 months”.
Both CommInsure and Challenger products will be available via the CFS platforms FirstChoice and FirstWrap by 1 June 2015, said Ms Rubinstein.
The global academic and regulatory trend towards “partial annuitisation” has been the driving force behind the decision, she said.
“We did do a fair amount of work looking at what the optimal retirement solution is, looking at the different retirement products around the world,” said Ms Rubinstein.
“It was clear to us that combining an annuity – either a lifetime annuity or a deferred annuity – with an allocated pension was a very attractive solution for a lot of people,” she said.
CFS is also very supportive of the government’s moves, via a Treasury discussion paper, to look at removing the impediments to deferred lifetime annuities in Australia, said Ms Rubinstein.
