Many fund groups are already believed to be assessing which of their funds can offer the best low volatility characteristics, the ability to provide flexible and regular drawdowns, and options such as a hedging against inflation.
Multi-asset funds are likely to be one obvious focus, as well as some bond/equity combinations and widely anticipated interest from some structured product providers.
One leading investment house is understood to be working out how to package together a number of existing funds for a relatively early entry into this market opportunity, while others are likely to launch new funds with no scale or track record.
Though centred on the UK market, these new products could appeal to older expats and locals in jurisdictions such as Dubai and Hong Kong.
Life companies such as Legal & General, Prudential and Standard Life have seen 40% plus falls in annuity sales after the Budget announcement.
Maarten Slendebroek, group chief executive of Jupiter Asset Management, told International Adviser that the fund groups industry has to “get its head around how to deliver good decumulation products”.
“What product is used has to be carefully thought through, together with the service you offer to the types of clients you’re after,” he said.
“We see it as an opportunity. It extends the lifecycle of the relationship with our client base.”
But he added that a properly researched new product would need a three-year development period.
“You need to convince professional intermediaries such as Mercer and Towers Watson that typically advise that kind of client group.”
