Richard_HowesChallenger Life, the largest provider of annuities in Australia, has confirmed its unitised annuity product designed as an investment option for big super funds and platforms.

The ‘guaranteed income fund’ launched yesterday will be first available on the BT Wrap, providing annuity-style income for retirees.

The product was flagged at the Australian Super and Investment Conference on the Gold Coast last month where a session on annuities was told that super fund members had a high level of interest in the product although there were design challenges.

Richard Howes, chief executive of Challenger Life, said yesterday that the creation of an annuity investment option required significant product development because unlike other platform products, annuities were flexible and bespoke products sold to individuals.

The product provides unitholders with set monthly distributions and a return at capital maturity. Different classes of units will reflect three, five, and seven-year terms. The investment is structured to be held to maturity however the fund will provide for early withdrawals where the investor’s circumstances change.

Howes said there had been a high level of demand from financial advisers for the product.

“We now expect to see the original and authentic retirement product feature more heavily in portfolio construction,” he said.

Chris Freeman, the head of BT Wrap, said the product would be available immediately, alongside recent enhancements which supported advisers with SMSF clients, given annuities were proving popular with the SMSF market.

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