The Retirement Account

The certainty of an annuity and the flexibility of drawdown in one simple tax-advantaged wrapper

Our investment proposition

The fund range for the Pension Drawdown element of The Retirement Account has been carefully selected in consultation with Square Mile, a respected independent investment research firm based in the City of London.

The Retirement Account fund range

*Standard Life Investments - GARS - This fund makes extensive use of derivatives. These are more complex investments, and it is important that investors understand that they carry additional risks in adverse market conditions. **Protected Index Portfolio - available late 2015.

We’ve made it straightforward for you to select the right fund, or combination of funds, for every client.

Firstly, we have catered for three levels of attitude to risk:
Cautious, Balanced and Adventurous.

Next, you can choose from three investment styles:

Active funds, Passive funds and Protected funds.

Any combination of funds can be selected (minimum initial investment £1,000). There’s no charge
for switching between funds, and clients can switch at any time, as often as they like.

Past performance is not a reliable indicator of future results.

Fund selection criteria
Together with Square Mile, we have been meticulous in our choice of funds, using stringent selection
criteria to agree the final range.

We have ensured that all our funds:

  • demonstrate an excellent track record of performance in their sectors
  • are well-known, and widely respected by investment experts
  • show a strong likelihood of future profits and successful investment performance
  • work to clearly defined objectives that can be tracked over time
  • offer excellent value in terms of charging structure
  • have appropriate risk levels for a retirement product

Three actively managed funds have been selected for each risk level (Cautious, Balanced and Adventurous). All are considered “best of breed”, but each has been chosen because it is outstanding when measured against one or more of the following criteria:

Strong performance compared with other funds of its type
- shaded green in the table above (Henderson Cautious Managed, AXA Framlington Managed Balanced, Threadneedle Global Equity)

Strong performance against its target objectives (e.g. outperforming a market index)
- shaded blue in the table above (Standard Life Investments –GARS, Jupiter Merlin Balanced Portfolio, Jupiter Merlin Growth Portfolio) 

Strong total returns achieved consistently over time, with an income** bias
- shaded gold in the table above (Invesco Perpetual Distribution, AXA Distribution, Henderson Global Equity Income)

**Income is reinvested, not distributed automatically - although of course clients can opt to draw an income from funds in The Retirement Account.

Our passive range consists of three funds, each invested in a ‘basket’ of index tracker funds managed by Vanguard. Vanguard is respected worldwide for its passive funds, and investors trust it to manage $3 trillion of their assets. 

The risk level of each Passive fund is determined by the amount invested in different tracker funds. Retirement Advantage consults regularly with Square Mile to determine an appropriate allocation into different markets and types of asset for each fund, in particular the balance between equities, company bonds, government bonds and cash.

The Protected Index Portfolio - exclusive to The Retirement Account offers your clients the opportunity for investment growth whilst providing a degree of protection on their money. It may be right for them if they need an income that is sustainable and have concerns about the effect of inflation over the course of their retirement.

 Find out more           

The Investec Multi-Asset Protector aims to provide capital growth from a multi-asset portfolio and to deliver protection at 80% of the investment’s highest price to date (however this is not guaranteed).

How we monitor fund performance

Our funds have been chosen for their robust and consistent performance, so we expect the range to be stable over time. However, fund performance is monitored closely by Square Mile. 

Retirement Advantage’s Investment Oversight Committee meets monthly with Square Mile to review performance. In addition, on a quarterly basis the IOC reviews a selection of funds on an in depth basis. The resulting report on fund performance and actions is published on the Retirement Advantage website and distributed to Financial Advisers with clients invested in the funds. 

If there are concerns about a fund, it will be monitored especially closely, for example, meeting with the fund manager to ensure action is taken to rectify weaknesses in the portfolio. Continued underperformance may result in a recommendation to remove the fund from The Retirement Account range, to be replaced with a more appropriate fund.

If a fund is removed from the range, clients will not be automatically switched to another fund, as this may not be in their best interest. Instead, clients and their Adviser will be informed, so that a decision can be made together.

About Square Mile

About Square Mile Square Mile’s team of investment analysts is one of the strongest and most respected in the UK. Their focus is investment research, meeting fund managers to understand how those managers work, how they think and how they react to markets.

Each of our funds has been selected by Square Mile for its ability to meet agreed investment objectives, its value for money and its investment performance. Funds are constantly monitored to ensure that they continue to provide investors with the best opportunity to meet their long term objectives, with changes made if necessary.

Over 1500 companies and businesses make use of Square Mile’s research, including financial advisers, life assurance companies and investment fund platforms.

Source: Square Mile Investment Consulting & Research


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