So we beat on, boats against the current, borne ceaselessly into the month of March, or at least we will do once my friend Keith has been able to celebrate what I’m pretty sure is his 13th birthday – happy birthday tomorrow Keith and indeed all other leaplings. The teenage years can be so challenging, can’t they?
Spring then. New beginnings, green shoots and all that. Have you got the energy? I’m not sure I do. Maybe I’ll feel more like it after the last and final pre-election giveaway Budget next week. Or when it stops being so relentlessly dreich. Or, much more excitingly, when the next scheduled lang kitten arrives safely, hopefully in the next day or so or even possibly by the time you read this. More news as we get it…something really worth celebrating.
More mundanely, it turns out any seasonally affective torpor I’m feeling isn’t shared elsewhere and that’s a good thing. The way I know this is that all of a sudden we’ve had a wheen of new proposition launches in the last week and coincidentally they’re all to do with retirement investment and planning one way or another.
So my big plan was to make this Update a rundown of all the new kit in an entertaining yet useful compendium-type manner. Sadly it turns out a shrewdie on LinkedIn beat me to it, so that’s fair taken the wind out of Mark’s sails, not that there was much there anyway. Still, I’ve still got a little puff left, so I’ll try to add a bit of colour.
For those too deep in the throes of ennui to click the link, the two most pressing developments are from Fidelity / Standard Life and Sparrows Capital / Just. Both are a teaming up of investment management with other bits of product provision and both are aimed at giving investors a smoother retirement investment journey in one form or another.
The Fidelity/SL piece is a “smoothed” managed fund (the inverted commas are theirs) which is run by SL and distributed via Fidelity’s platform. I don’t have a lot of details yet, but if the success of PruFund proves anything it’s that the light is on and burning brightly for some advisers and clients looking to answer the perennial question, “what actually did happen to unitised with profits?” and so if that’s you and you are interested in smoothed managed then here is one.
The Sparrows/Just collab (I remain at all times down with the kids) mashes up (see, told you) the Sparrows capped fee portfolios with Just’s Secure Lifetime Income product. In much the same way as Just’s other partnerships with Copia and 7IM, the idea is that the portfolios are uncorrelated to the SLI product but run alongside each other nicely.
As if it was timed that way, there’s a new report out on people changing their retirement plans from the Pensions Management Institute. I can’t find the report online but you can read about it here and perhaps at some point the PMI will stick it up on their website for mortals to find.
All three of these Things have one Thing in common – they highlight a desire from consumers for greater certainty in retirement income. And that’s not surprising; the cohort of clients coming through in the next few years will start to include more individuals who are genuinely dependent on their accumulated DC pot as opposed to having at least some secured benefits tucked away in their past. 81% of consumers in the PMI paper valued a guaranteed retirement income for life. Two thirds liked the look of an income that rose with inflation.
They would say that, wouldn’t they…but just putting it out there – eventually what clients want sort of coalesces into accepted practice. In our most recent State of the Advice Nation survey 67% of our respondents said their CRP was either identical or very, very close to their CIP. Total return strategies dominate, for all the reasons we’ve all gone over 100 times. Meanwhile the industry has been slow to come up with workable propositions which might form at least part of a coherent CRP. There’s a mismatch between the two, and I can’t bring myself to believe that will last.
So we have new kit (I’m not saying ‘solutions’) trying to sort that mismatch; now we need to gauge appetite from clients for kit (I’m still not saying ‘solutions’) which does more than a typical multi-asset fund or basic MPS. Watch this space.
And your music choice this week? You took the brutality of Borknagar last time, and I have to let you know that there’s a new Judas Priest record out next week and all major bookmakers have stopped taking bets on what you’ll be getting to soundtrack the Budget. So as a sort of palate cleanser here’s one of those rare perfect songs. This one is good for quieter moments. It’s a solo live version but the record version is fabulous too.
