St James's Place launches three new InRetirement funds
Wealth management group St James’s Place has launched its new InRetirement fund range, which has been developed specifically for those looking to support a regular income through retirement.
It has identified the next decade as the decade of retirement and one of the key challenges is the 'Baby Boomer' generation retiring. Today in the UK, there are around 12 million people over the age of 65, roughly 20 per cent of the population, and many are living longer. But it poses a new challenge – providing a sustainable income in retirement.
As a response, it is launching three new funds on 21 September, named Prudence InRetirement, Balance InRetirement and Growth InRetirement, to reflect their distinctive investment objectives. They have been designed to cater for a range of client goals in decumulation, from prioritising a steady income to maximising the value of an inheritance.
The new funds have been launched in response to the growing needs of clients, where retirement income considerations will be more important as the age of investors increases. In addition, the advent of pensions freedoms has created a greater need for advice towards retirement goals, as options grow.
The funds will be highly liquid, with a total return focus, designed for investors who are looking to achieve a regular income through ongoing withdrawals from their investment pots. The launch is another step towards the St James’s Place move to bring together ongoing relationship-based advice, tools, products and investments into a dedicated retirement offering for clients.
The Prudence InRetirement fund has the least investment risk, suitable for clients who have only some capacity for loss and flexibility within their individual circumstances.
The Growth InRetirement fund has the most investment risk, suitable for clients who have a greater capacity for loss and flexibility within their individual circumstances.
The Balance InRetirement fund is situated in the middle of the two other fund profiles.
Rob Gardner, Director, Investment Management, St James’s Place, says: “The next decade is going to be the decade of retirement. In the past 100 years we’ve seen a rapid increase in life expectancy. At the turn of the last century you could expect to live until age 38, today the figure is into the 80s. And children born today have a 50 per cent chance of reaching their 100th birthday.
“We have an ageing population, too. The proportion of the UK population aged 65 or over versus those 18 and under is the highest it’s ever been. It’s amazing to consider that every day in the UK some 2,000 people will celebrate their 65th birthday. They have spent the past forty years in the workplace, earning a salary and – hopefully – saving towards their retirement.
“The question is: how do they turn their retirement savings into an income stream that lasts as long as they live? But not only that, how does that income keep pace with inflation? A comfortable income today may not be enough in ten, twenty or thirty years’ time.
“The challenge, the decumulation challenge as we call it in the industry, is simply solving the problem of turning your retirement savings into a lifetime income stream.
“At St James’s Place we believe that the solution is best achieved through the combination of high quality relationships, an advice process that specifically focuses on mitigating the risks in retirement supported with goal-based planning tools, and access to an investment solution that has been purpose-built to deliver an inflation-proof income stream in retirement.”
State Street Global Advisors will manage the funds, with responsibilities including ongoing rebalancing of the underlying funds, cash flow management and currency hedging.
Dan Farley, CFA: CIO, Investment Solutions Group at State Street Global Advisors, says: “Increased longevity and the rise of multi-stage lives have put a focus on the need for well-designed post-retirement solutions. We have worked with St James’s Place to develop the InRetirement range, a unique proposition designed to balance investors’ needs between growth, capital protection and reliable income, while offering them simplicity and flexibility. This integrated solution combines St James’s Place asset allocation and unique fund selection process with State Street Global Advisors’ extensive experience in managing multi-asset retirement portfolios. We believe that this approach will help investors cut through the complexity of investing in retirement.”