The firm is launching a pensions solution for IFAs that will be available via the firm’s Investcentre platform
AJ Bell is launching a decumulation service aimed at IFAs.
The Retirement Portfolio Service is a discretionary managed portfolio that will be available to professional advisers via the firm’s Investcentre platform.
It combines four strategies designed to ‘prolong the longevity of portfolios in decumulation’ and minimise sequencing risk.
Investments will go into three different buckets, with 90% split evenly between the AJ Bell Income and Growth and AJ Bell Income funds, both of which target a 4% annual yield, and the remaining 10% held in cash.
The funds’ 4% yield will then go into the cash account.
There will be no additional charge for the service other than the 0.15% AJ Bell charges for the two funds and its ongoing charges figure capped at 1%.
The firm said the cash part of the portfolio ensure a ‘client’s income needs are covered over the short to medium term’.
Chief investment officer Kevin Doran said that given the popularity of the pension freedoms there is a real need for products and services that help advisers deliver an effective retirement proposition.
With income drawdown now the most popular retirement income option, advisers and their clients are having to get to grips with managing portfolios in the withdrawal phase and the specific challenge of sequencing risk.
He said that their new Retirement Portfolio Service has been designed as a ready-made solution that enables advisers and their clients to focus on their income needs, without having to worry about the running of the underlying portfolio. The cash bucket will ensure they don’t have to sell investments at the wrong time and the yield generated by their two income funds should be able to support a sensible withdrawal strategy over the long term.
The business has rapidly expanded its discretionary portfolio and managed fund range in recent years beneath former Wealth Manager cover star Doran while cutting client fees as it scaled up.
The new service was designed in conjunction with IFAs across the country.