The retirement ecosystem, which serves retirees, consists of three primary components:

• Consumers approach retirement with most having accrued the largest portion of their liquid wealth through super funds. For the majority of Australians, their super fund is their retirement launching pad. Many retirees will be looking to their super fund for help, guidance and advice, and, in most cases, APRA-regulated super funds will manage these accumulated retirement savings.

• Financial advisers are the profession that can provide the most tailored expert retirement advice. This advice can be comprehensive, taking a household view and accounting for other assets, circumstances and preferences. It can also be delivered in quite a personal way, instilling confidence. At the moment, something in the order of 15 per cent of people enter retirement with the assistance of a financial adviser.

• The government plays multiple roles in the retirement ecosystem. First is as a provider of the Age Pension, with 80 per cent of future retirees expected to at least be partial participants. Second is in the government’s role of determining system settings: the policy framework, tax settings, and setting expectations for regulators.

Service providers are also an important part of the retirement ecosystem. Examples include lifetime income solution providers, investment managers, and technology groups that facilitate the efficient provision of quality advice. The retirement ecosystem may evolve significantly in the future. For instance, housing and aged care might one day be viewed as primary components.

There is considerable uncertainty around how each primary component will evolve.

It is uncertain whether the super sector will reach the appropriate standards set out in the Treasury’s recently finalised Best Practice Principles for Retirement, how long it will take to get there, and the degree of dispersion that will exist between funds. The regulators have identified that there is slow development in retirement strategies and that there are laggards in the super sector.

Similarly, there are many uncertainties in the financial advice sector. These relate to, but aren’t limited to, the outlook for advice supply, the extent to which the sector provides more scalable advice services, whether efficiency gains can be achieved and shared to lower the cost of advice, and the degree to which advice processes will evolve to account for lifetime income products.

The list of uncertainties related to the government is sizable. While Age Pension settings do not appear to be under any scrutiny in the near-to-medium term, policy settings are critical to the shape of the retirement ecosystem. At the heart of these are system settings around the provision of help, guidance and advice by super fund trustees and financial advisers. It is a complex challenge to design settings that afford all Australians access to a level of assistance that is beneficial, to limit the potential for significant harm, all while not undermining the financial advice profession.

How well all the components of the retirement ecosystem interact will be critical to the level of system outcomes. There are so many questions. For instance, to what degree will super funds triage members with complex needs towards external financial advisers and accept that those members may be moved to a different superannuation offering? And will the advice industry accept that some super fund guidance or advice service will be necessary to ensure that all Australians can be directed towards an appropriate retirement strategy?

Scratch beneath the surface and the retirement ecosystem feels vulnerable and unstable. Distrust and lack of respect between the advice industry and the super fund sector can only limit the potential system outcomes. To this extent, APS reminded me how the choice of words is critical, especially that word ‘advice’. It will take time for some parts of the retirement ecosystem to accept that it is difficult to measure benefits and create accountability in services compared to products. Flare-ups of any kind will undermine confidence in the system, and ultimately, confidence for Australians to appropriately enjoy their retirement.

Overall, I am positive about what can be achieved. Strong leadership was on display at APS. Super fund and advice industry leaders weren’t just holding olive branches; they could see the benefits for retirees and could identify business opportunities in working more collaboratively.

If retiree outcomes are put at the heart of decision-making by all members of the retirement ecosystem, the system will be well-placed to deliver on its sizable potential.

David Bell is executive director of The Conexus Institute. The Conexus Institute is a not-for-profit think-tank philanthropically funded by Conexus Financial, publisher of Investment Magazine.