3 companies to benefit from the growth of retirement planning

We want to live comfortably when we retire and do things we dreamed of doing during our senior years.  Investors have the opportunity to supplement whatever superannuation they have now with investments in companies that handle retirement planning, superannuation and SMSF funds for other people.

Here are three companies in this industry that have achieved an attractive rate of shareholder returns over the past five years.

Investment manager BT Investment Management (ASX: BTT) oversees its own wholesale and retail funds, as well as managing mandates on behalf of Westpac.

With the increasing number of SMSF opportunities for new business, it plans to create new investment products that would attract SMSFs to managed funds. Currently, only a very small percentage of investments from SMSFs are for managed funds, so there is a sizeable amount of potential growth if they can offer products with attractive returns and low volatility.

Over the past five years, it has offered an annual average shareholder return of 28.8%.

IOOF Holdings (ASX: IFL) offers an array of financial services such as portfolio administration, financial planning and stockbroking. As such, it is already involved in SMSF creation and management and can benefit from the growing SMSF industry now and in the future.

It makes 56% or $355 million of its total revenue from platform management and administration, with investment management second at $129.3 million. It saw a 13% increase in NPAT before abnormals in 2013, bringing it back into line with what it achieved in 2010 and 2011.

In the future the amount of funds to be contributed to general superannuation will be increasing from 9.25% to 12%. So funds under its management through super will grow accordingly, as will associated fees and service expenses.

Its 5-year total annual average shareholder return was 23.9%.

Challenger Financial (ASX: CGF) is another company that offers investors a way to achieve good returns for their own retirement by tapping into the growing popularity of annuities.

Annuities offer a steady stream of income in retirement from earlier investments. The rate of return is set at the beginning, so will not fluctuate according to financial markets. The capital can be returned as a lump sum upon term expiry or over time as annuity payments.

For people who are unsure that superannuation will provide an adequate return, they can have annuities growing alongside them during the same time, and feel more certain about their retirement.

In 2013, its NPAT before abnormals was up 12% to $353 million from $315 million, and its 5-year total shareholder return was an average annual 29.51%.

Foolish takeaway

All investing is for having more in the future by giving up the enjoyment of using capital in the present. Investors are always concerned about rates of return, though short-term returns can vary greatly.

If we are to be prudent with our choices in investment we have to be pretty certain about returns. Even a difference of 1% over long periods of time can make the end value surprisingly different between two potential investments.

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Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

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