Earlier this month, Generation Life and BlackRock announced they had formed a strategic alliance with a goal to develop a range of holistic longevity solutions.
Speaking to InvestorDaily’s sister brand Money Management, Generation Life chief executive Felipe Araujo said BlackRock president Larry Fink wants “reinventing longevity solutions” to be part of his legacy when he eventually steps down and sees Australia playing a large role.
BlackRock has already partnered with life companies in the US on a product called LifePath Paycheck, which allows US individuals to convert their 401(k) retirement savings into a steady monthly income.
In his 2024 annual letter, Fink wrote: “Of course, every country is different, so every retirement system should be different. But Australia’s experience with supers could be a good model for American policymakers to study and build on.”
With this enthusiasm for the Australian superannuation market in mind, Araujo said a delegation visited Australia and met with fund managers, life companies and other financial services firms to seek a suitable partner.
“We were contacted by BlackRock and that was a very pleasant surprise. Generation Life has been in this market for 3.5 years and we met with the BlackRock delegation who were doing their due diligence on how they could reinvent the market,” he said.
“What attracted them is our capacity to innovate, we have a lifetime annuity product, investment bonds, we have a life licence and a distribution team. What attracted BlackRock to us is their global scalablity and the technology they will bring as part of the alliance.
“It is phenomenal to have this backing. BlackRock are US$10 trillion; they are not going anywhere soon. We are asking Australians to trust us with their retirement savings and it is important we can give them as much reassurance as we can.”
The two firms will launch a range of longevity solutions and Araujo said this will likely include one for advisers, one for platforms and one for institutional funds.
“We want to have multiple products as we recognise one solution isn’t a silver bullet. We are not there yet, we will take our time as we don’t want to build a product that no one elects to use,” he added.
For example, it will likely include elements of the existing LifePath Paycheck, which is a guided journey solutions for retirees, as well as GDG’s lifetime annuity products.
Nevertheless, he expects by this time next year that the firms will have a solid proposition in the market and have been selected by a superannuation trustee to be their partner for their longevity solutions, with the potential for further super partnerships in due course.
“We expect this will be driven by member demand as well as government policy,” Araujo said.
“The government has been focusing on the retirement income covenant, which stipulates trustees must have a strategy in place that caters for longevity, I believe that the government will focus on this more heavily. It will be as much as member request as much as governments ensuring funds have a solution in place.”
