Strategic Report | Governance | Financial Statements | 19
SECURE LIFETIME INCOME | BENEFITS TO THE CLIENT The most typical investment portfolio used by financial advisers has a 60% equity and 40% bond weighting. We’ve commissioned independent research that concludes by substituting some of the bonds with our GIPA, advisers can deliver better outcomes for the majority of their clients. And better outcomes means higher income and higher portfolio values.
GUARANTEED INCOME FOR LIFE We became famous for introducing medical and lifestyle underwriting into products we used to call pension annuities. Today we prefer to call them guaranteed income for life solutions – because that’s how customers talk about them. By asking customers a series of questions about their medical conditions and lifestyle we were able to provide a personalised offer, which typically resulted in over six-in-ten customers receiving a better retirement income than they would have received from a non-medically underwritten offer. Typically, the additional income was worth thousands of pounds to a customer over their expected retirement. LIFETIME MORTGAGES For avid readers of our previous Annual Report, you may have spotted we introduced a similar innovation into the lifetime mortgage market. By using medical and lifestyle underwriting we were able to offer around six-in-ten customers a better outcome, which resulted in a lower interest rate or a higher amount that could be advanced. HELP, GUIDANCE AND PROFESSIONAL ADVICE We’ve developed the UK’s most comprehensive and sophisticated digital retirement service. It’s to support people who want help, guidance and professional advice when they are approaching retirement and when they decide to start accessing their pension benefits. Over 50 employers across the UK are now using the service, and those pension schemes have over 300,000 pension scheme members. BULK QUOTATION SERVICE Our bulk quotation service has been designed to support pension scheme trustees of small and medium sized schemes. We capture precise details of the pension scheme in our digital platform and continuously track the funding position of the scheme. This equips us to alert the trustees as soon as the scheme is in a position to execute a pension de-risking transaction. We are adding hundreds of schemes to the platform each year so that we can help more schemes to advance their de-risking transactions at the earliest opportunity. SPOTLIGHT ON SECURE LIFETIME INCOME There are criticisms by some market commentators that there has been little product innovation since pension freedoms were introduced. We think our Secure Lifetime Income solution is an excellent contribution to challenge that assertion. Professional financial advisers administer client investment portfolios on modern retail fund platforms. All their investments, whether they be pensions, individual savings accounts, or other general investment accounts can all be managed holistically on these efficient, digital platforms. We have developed a guaranteed income producing asset (“GIPA”), delivered by our Secure Lifetime Income solution, that sits inside these modern digital platforms, alongside clients’ other assets such as equities, bonds and other alternative assets. We’ve created a simple, digital solution that makes it efficient for the adviser to add our GIPA into their investment portfolios. But the bigger benefits emerge for the advisers’ clients.
TRADITIONAL DRAWDOWN SIPP PORTFOLIO
Equity Bonds
60% 40%
NEW BLENDED DRAWDOWN SIPP PORTFOLIO
Equity Bonds
60% 20% 20%
GIPA
Our GIPA, assists financial advisers to manage some of the most significant risks impacting clients who are withdrawing their pension benefits, or what often gets referred to in the industry as decumulating. Those risks are (i) sequence of investment returns risk and (ii) longevity risk. It’s a little complicated to explain here but you can find out more by visiting our justadviser.com website. But in short, let’s just say our GIPA, delivered by Secure Lifetime Income is turning the heads of professional investment managers. More positive innovation from Just to help advisers and their clients. There’s more where that came from. We are retirement experts and we’ve got lot’s more innovation in the pipeline to support our growth agenda, and most importantly, to help deliver better outcomes for our customers and ensure we fulfil our purpose. We help people achieve a better later life
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