Manulife Investment Management is extending its reach in Australia to the wealth management market through a partnership with Sydney-based ClearView Wealth.
The firms announced that they had signed a memorandum of understanding (MOU) to develop investment solutions for the Australian market.
The asset management arm of insurer Manulife will provide investment expertise in public and private asset classes, while ClearView, a life insurance, wealth management and superannuation provider, will provide local development and distribution capabilities to the partnership.
“Australia has always been an important market for us; we have been trying to build our business there from an institutional perspective. It’s a shame that we had the Covid situation that prolonged our process, but the opportunity with ClearView is a great opportunity for us to try to crack the market in Australia, particularly on the retirement front,” Peter Kim, head of institutional business for Asia Pacific (ex-Japan) at Manulife IM, told AsianInvestor in an exclusive interview.
He added that one of the core objectives of the partnership is to “help improve the decumulation phase of the retirement programmes in Australia.”
Australia superannuation has been “very good at the accumulation phase” of retirement, but less so at the decumulation phase, ClearView managing director Simon Swanson told AsianInvestor.
“That’s where the liability skill of Manulife comes to the fore. That’s the skill of saying, ‘here’s a person’s liability in retirement and these are the assets that are best deployed to suit that need’,” Swanson said.
The details of the product offerings for retirees are still being worked out, but Kim and Swanson say that flexible options will be provided to cater to “as many retirees as possible”.
“Retirement now is a long period – it used to be a very short period. And as people's longevity increases, you actually need a different blend of asset classes to match those needs,” Swanson added.
In general, however, the options will take on a liability-driven investment approach.
“You can look at it being that the liability-driven investment capability as the umbrella and within the umbrella, it depends on the needs of the individuals you can include. It definitely includes fixed income, but it also has equity and also can have private assets or alternative assets to match the longer-term liabilities potentially needed,” Kim said.
A fixed income approach would work for investors in their retirement seeking to achieve income with minimal risk, Kim explained. Equities and private assets would also come into play, particularly as investment opportunities that aim to bring the income portion even higher during the retirement phase.
Swanson added that the partnership is a strategic move for both parties. “ClearView is only focused on the Australian market; we recognise and acknowledge the skills and experience of Manulife globally, particularly in liability-driven investments,” he said.
He also brushed aside concerns about competition with large superannuation players.
“There's a lot of fund-to-fund structures in Australia as opposed to vertically-integrated organisations,” he said.
“There’s lots of diversity out there. It’s unlike our banking system, which is almost an oligopolistic structure, whereas the superannuation system is not the case at all,” he added.
This article has been edited to clarify a quote by Peter Kim.