7IM has launched a retirement income solution (RIS) on its platform, designed to help advisers support their clients’ retirement plans.
The solution uses a “bucketing” approach, which takes all of a client’s selected assets and treats them as a single portfolio that is aligned with their risk profile. Investments are then allocated into a series of “buckets” invested across short, medium and long-term horizons.
The short-term buckets are invested in lower-risk assets, while medium-term and long-term buckets aim to provide capital growth and contain higher-risk investments.
Alongside the three investment buckets is a cash bucket, designed to provide another year of income during periods of market downturn.
7IM said the new solution provides advisers with all the tools needed to keep clients informed about their retirement portfolio, including a personalised report demonstrating how a client’s money will be invested and the likelihood of their desired income requirements being achieved over the duration of the RIS plan.
The investment group has partnered with discretionary fund managers EQ Investors, RBC Brewin Dolphin and Omnis Investments and plans to work with others to offer their investment solutions alongside 7IM’s own to provide advisers with greater flexibility and choice for their clients.
Verona Kenny, managing director of intermediary at 7IM, said the introduction of the pension freedoms had created a number of potential pitfalls for pension savers to navigate.
Kenny said: “Since the introduction of pension freedoms, people have had more control over – and decisions to make about – their pension pots than ever before. But that increased freedom has also introduced a minefield of potential pitfalls that could leave people with not enough money to see them through retirement. Yet despite this, as an industry, we haven’t really all worked together to collectively help retirees navigate these challenges.
“That’s why we have got together with several key partners to launch the 7IM Retirement Income Solution. The 7IM RIS has been designed to support the retirement plans that advisers have created with clients. It provides greater control over clients’ income in retirement while mitigating many of the pitfalls associated with income drawdown so advisers can feel confident that their clients’ money should last the distance and can adapt to the ever-changing world. We have focussed on not just delivering a flexible and innovative solution but we are delivering this in an engaging manner for advisers and critically their clients.”
Sophie Kennedy, joint CEO at EQ Investors, commented: “We are excited to be a launch partner for 7IM’s Retirement Income Solution. Drawdown is providing retirees with more freedom to create an income that suits their lifestyle and vary this income at different stages of their retirement. This new solution will help advisers manage this transition.”
