"New" income product for retirement?

LHW99

I read this article:

https://www.moneymarketing.co.uk/news/sparrows-capital-and-just-retirement-partners-to-launch-retirement-income-solution/

Having done so, my thoughts are:

"Market portfolio" - Equity based one assumes, perhaps with a sprinkling of bonds.

"Guaranteed income-producing asset" - I presume an annuity of some kind?

So is this actually a new solution, or is it a clever marketing of an existing option, which people here already consider?

It does seem to me that if you employ an IFA, they would be able to put together something similar without using some specific product to do so.

Is it likely to charge increased fees? - my thought is probably so, other wise why invent what they call a "blended solution" (https://www.justadviser.com/products/guaranteed-income-solutions/).

I'd be interested in the forum's thoughts.

Albermarle

It is service just for financial advisors, not something you can buy off the shelf.
AIUI advisors often use these types of services, rather than trying to design bespoke portfolios from scratch themselves.

ewaste

https://www.pensionsage.com/pa/Standard-Life-and-Fidelity-partner-up-to-launch-new-smoothed-fund.php

Theoretically a similar product or idea 🤷‍♂️ 

LHW99

Albermarle said:

It is service just for financial advisors, not something you can buy off the shelf.
AIUI advisors often use these types of services, rather than trying to design bespoke portfolios from scratch themselves.

Which does suggest to me that it is more marketing than anything very new, as similar things (presumably) have been available to advisors for some time.

dunstonh

ewaste said:

https://www.pensionsage.com/pa/Standard-Life-and-Fidelity-partner-up-to-launch-new-smoothed-fund.php

Theoretically a similar product or idea 🤷‍♂️ 

I dont believe that is a similar product.    That particular tie up is a reinvention of the With Profits fund done in a modern way.

The one LHW99 is referring to is an MPS with an annuity within the platform.   Something several platforms offer (in connection with the MPS of the adviser's choice).   I was in a meeting with a different software supplier that modelled the use of annuity in place of gilts and bonds and showed outcomes.  (i.e. your portfolio was higher in equities as the bond/gilts side was reduced).   They also modelled buying the annuity younger and locking in current rates whilst not having the annuity income paid out but retained in the pension wrapper to avoid tax and reinvested to buy units.

FIREDreamer

dunstonh said:

ewaste said:

https://www.pensionsage.com/pa/Standard-Life-and-Fidelity-partner-up-to-launch-new-smoothed-fund.php

Theoretically a similar product or idea 🤷‍♂️ 

I dont believe that is a similar product.    That particular tie up is a reinvention of the With Profits fund done in a modern way.

The one LHW99 is referring to is an MPS with an annuity within the platform.   Something several platforms offer (in connection with the MPS of the adviser's choice).   I was in a meeting with a different software supplier that modelled the use of annuity in place of gilts and bonds and showed outcomes.  (i.e. your portfolio was higher in equities as the bond/gilts side was reduced).   They also modelled buying the annuity younger and locking in current rates whilst not having the annuity income paid out but retained in the pension wrapper to avoid tax and reinvested to buy units.

@dunstonh

What is MPS?

dunstonh

What is MPS?

Managed Portfolio Service.  Basically, a portfolio of funds either run within a fund (like the VLS60 fund) or a portfolio of funds working a similar way but using software on the platform (like the VLS60 MPS - which DIY investors don't get access to).

Going back to the Standard Life/Fidelity match-up, I wonder if it is because Fidelity has seen just how much money has ended up going to Pru with its Prufunds (which operate on a smooth basis).   Fidelity, despite being one of the oldest platforms, is also the largest loss maker.  It's market share has also fallen from 15.5% in 2018 to 11.8% in 2022. If you are losing market share and making the greatest losses, then you need to innovate or copy to turn it around.

FIREDreamer

dunstonh said:

What is MPS?

Managed Portfolio Service.  Basically, a portfolio of funds either run within a fund (like the VLS60 fund) or a portfolio of funds working a similar way but using software on the platform (like the VLS60 MPS - which DIY investors don't get access to).

Going back to the Standard Life/Fidelity match-up, I wonder if it is because Fidelity has seen just how much money has ended up going to Pru with its Prufunds (which operate on a smooth basis).   Fidelity, despite being one of the oldest platforms, is also the largest loss maker.  Its market share has also fallen from 15.5% in 2018 to 11.8% in 2022. If you are losing market share and making the greatest losses, then you need to innovate or copy to turn it around.

Thanks.

I annuitised about 70% of my drawdown pot with the remainder going into global ETFs like HMWO and VWRL.

The JL RPI annuity plus two small DBs guarantees retirement and the drawdown pot (plus any contributions made until June) will probably just get state pension amount removals (capped to stay below 40% tax limit) from my forthcoming retirement in June until the actual state pension kicks in (7 years).

We have more than enough even without this drawdown pot - (the lovely) @Sea_Shell doubled pretty much.

I think that was a reasonable sleep at night choice for me anyway.

Albermarle

 Fidelity, despite being one of the oldest platforms, is also the largest loss maker.  It's market share has also fallen from 15.5% in 2018 to 11.8% in 2022.

Presume that is on the Fidelity advised side ?

The retail platform doubled its customer base when they bought the L& G personal investing business a couple of years ago.  Although it only increased their AUM by about 30% 

dunstonh

Albermarle said:

 Fidelity, despite being one of the oldest platforms, is also the largest loss maker.  It's market share has also fallen from 15.5% in 2018 to 11.8% in 2022.

Presume that is on the Fidelity advised side ?

The retail platform doubled its customer base when they bought the L& G personal investing business a couple of years ago.  Although it only increased their AUM by about 30% 

The data was from a research company that puts out an annual report on the state of the advisory platform market.  It only focuses on platforms available to intermediaries.   The market share figures are at intermediary level.   However, the profit/loss figures are for the platform as a whole.   The AUM disclosed in the report is £83bn.  In another report, the data supplied by Fidelity says its AUM under intermediaries is £45.59bn

Bostonerimus1

This just sounds like a wrapper provided by a middleman that I'm sure will come with fees. I'll bet that these fees will be at the back of any literature in small print...maybe guarded by a leopard...and won't be insignificant.

The DIYer can do the same by setting up an appropriate asset allocation including guaranteed products like saving accounts, bond ladders held to maturity, SP, DB pensions and annuities.