FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION.FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY.
NOT FOR PUBLIC DISTRIBUTION.
Santander Asset Management
Simon DurlingInvestment Product Specialist
Enabling Savers and Investors to Understand Risk
April 2014
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FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION.FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY.
NOT FOR PUBLIC DISTRIBUTION.
Learning outcomes
Understand the key lessons identified from the Pensions Institute report
Identify the key opportunities and responsibilities for advisers following the recent budget announcements
Appreciate the benefits of recommending risk targeted investment solutions to meet savers needs
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FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION.FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY.
NOT FOR PUBLIC DISTRIBUTION.
Pension Institute report (December 2013)
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FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION.FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY.
NOT FOR PUBLIC DISTRIBUTION.
The Pension Institute report – Summary of Findings
Help savers focus on their savings goals
Provide better information to help savers understand if their plans are adequate to achieve their savings goals
Explain how investment risk helps achieve savings goals
Clear mismatch between risk score and actual risk tolerance
Savers would benefit from products with clearly communicated risk objectives
Lesson 3
Lesson 4
Lesson 5
Lesson 1
Lesson 2
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FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION.FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY.
NOT FOR PUBLIC DISTRIBUTION.
The Pension Institute report – What this means for investors
‘Today people who hold cash equivalents feel comfortable. They shouldn't. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value’
Warren Buffet
Savers appear more concerned with what might happen rather than what will happen
Most are prepared to miss their goal rather than take on sufficient investment risk
Most people prioritise rainy day funds over specific savings goals
The evidence suggests there is a stronger need to seek investment advice and education to help savers make better long term decisions
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FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION.FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY.
NOT FOR PUBLIC DISTRIBUTION.
The Pension Institute report – What this means for providers
Before Today
Clearer product solutions – simple and transparent with clearer risk objectives
Clarifying the potential outcomes – provide material to articulate investment paths
Articulating the risks of investment – support advisers to educate investors
Highlighting the risks of not investing – provide Advisers with support material to assist with the education process
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FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION.FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY.
NOT FOR PUBLIC DISTRIBUTION.
The Pension Institute report – What this means for advisers
Good news! – evidence suggests in the report that investors still need professional investment advice and education
Robust risk profiling and education is the key to recommending an appropriate solution that the investor understands
Providing investors with projected investment paths supports validating the education process
Investor outcome models enables advisers to manage their clients future expectations and “contract” with them over risk decisions
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FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION.FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY.
NOT FOR PUBLIC DISTRIBUTION.
“Budget Bombshell!” Question for you – Is this a budget bonanza or a potential budget booby trap?
Daily Mail 20 March 2014 400,000 annuity clients
looking to make investment decisions
Greater need for investment advice
15K Super ISA and the ability to transfer to and from cash and stocks and shares
Opportunity Challenges
Difficult for advisers to free up time to take on the large numbers of additional clients
Clients seeking alternatives to annuities still require secure income
Greater responsibility on getting investment advice right
Potential liability for adviser business if solution inappropriate
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FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION.FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY.
NOT FOR PUBLIC DISTRIBUTION.
Risk Targeted Investment Solutions
Huge increase in the use of risk targeted investment solutions
Provide greater piece of mind for advisers and offer investors an insight to their future investment journey
Enable advisers to spend more time in front of existing and new clients
New propositions designed to drive the costs down offering investors better value
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FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION.FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY.
NOT FOR PUBLIC DISTRIBUTION.
Santander Atlas Portfolios - Client outcomes & transparency
Client journey and outcome
• Partnership with Moody’s Analytics to outline the possible ‘outcomes’ for each portfolio
• Guide to the investment journey with potential ups and downs
• Translation of the ‘volatility’ story into something more meaningful for clients
Transparency
• Our aim is to be open and transparent, and disclosing all charges and costs for investing
• Our disclosures are consistent with the guidelines from the Investment Management Association (IMA)
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FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION.FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY.
NOT FOR PUBLIC DISTRIBUTION.
Summary of learning outcomes
Understand the key lessons identified from the Pensions Institute Report
Identify the key opportunities and responsibilities for advisers following the recent budget announcements
Appreciate the benefits of recommending risk targeted investment solutions to meet savers needs
FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION.FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY.
NOT FOR PUBLIC DISTRIBUTION.
Santander ISA Managers Limited (Company Registration No. SC151605) and Santander Asset Management UK Limited (Company Registration No. SC106669) are both registered in Scotland at 287 St Vincent Street, Glasgow G2 5NB, United Kingdom. Both are authorised and regulated by the Financial Conduct Authority. FCA registered numbers 171448 and 122491 respectively. www.santanderassetmanagement.co.uk Telephone 0845 6000 181.Calls may be recorded or monitored. Santander and the flame logo are registered trademarks.
For intermediaries and professional investors only. Not for public distribution.
The value of investments may go down as well as up and investors may not get back the full amount invested. Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. The responsibility for assessing the suitability of financial products remains solely with the financial adviser. The opinions expressed here are subject to change and do not necessarily reflect the views of Santander Asset Management as a whole or any part thereof.