The Sanlam Retirement Income Service aims to blend products, income needs and the personal tax situation of individual savers into a single tailored solution.
Sanlam Private Wealth (SPW) said the service would develop individual portfolios making use of the full range of tax wrappers, including ISAs, bonds, pensions and other investments.
SPW said the serivce was based on a recently commissioned white paper from Dr Paul Cox of Birmingham University, entitled ‘Helping Consumers and Providers Manage Defined Contribution Wealth in Retirement’, which examined longevity, wealth and risk as well as the array of solutions currently available in the market.
“SPW has combined these findings and financial modelling with its own expertise to inform the design of its bespoke solution,” the company said in a statement.
Craig Massey, chief executive of Sanlam Private Wealth, said the academic study was commissioned to better understand the issues facing retirees as they begin to drawdown on their pension and other savings.
“There has been a huge amount of research focusing on optimum investment strategies for the accumulation stage in an investor’s life, but very little on the topic of decumulation,” he said.
“One of the biggest challenges for our industry is how to manage drawdown money safely and sensibly for clients, particularly with the large number of retirees now opting for drawdown rather than taking annuities.”
SPW said the structure of a pension portfolio developed by the new service would generally comprise three elements:
Part 1 (years 1-2): Essentially a cash fund to meet immediate needs.
Part 2 (years 3-5): A largely fixed income fund to produce cashflows that meet anticipated future expenditure.
Part 3 (year 5 on): An equity fund fund that aimed to maximise the longevity of investments as well as producing regular income streams to top up Part 1 and Part 2.
