"As we're going through this MySuper change, we've got an opportunity to assess the default option and make it better [by] putting in target date funds or lifecycle investments strategies," Mercer head of investment consulting Australia and New Zealand Graeme Mather told InvestorDaily.
"We've got a strong fiduciary responsibility, mainly in working with the superannuation funds, to create a default that's better for members than what exists currently," he said.
Currently, a default fund in Australia would be made up of 70 per cent equity-like investments and 30 per cent bond-like investments.
"Whether you're 20 years old or 80 years ago, you'd be fitted into this fund," Mr Mather said.
"We fundamentally don't agree with that one-size fits all approach."
A lifecycle strategy would therefore be more suitable, such as the common aged-based default offer where the member's investments become less risky as the members get older, he said.
However, in response to how financial advisers would be affected by lifecycle investment options, Mr Mather said he didn't believe it would take work away from them, as it would be suitable for disengaged members.
"The engaged members are still going to work with a financial planner and in fact, the lifecycle strategy should give you a higher balance at retirement, which means members would be more likely to start to engage with planners," he said.
"It could potentially mean more work for them."
In addition, many super funds that had made a submission to the Australian Prudential Regulation Authority for a MySuper licence stated they were looking to provide a lifecycle investment strategy as their default offering, he said.
