Sanlam launches retirement income service

It aims to blend the best aspects of specific products with a tailored strategy that reflects each client’s personal requirement for income and, crucially, their personal tax situation. The service will allow a portfolio to be unbundled between as many tax wrappers as needed, so that ISAs, bonds, pensions and investments can be attuned to one over- arching investment strategy.

The structure of pension portfolios in the Sanlam Retirement Income Service will comprise of a liquidity fund to meet immediate cash flow needs, an asset matching fund to produce cashflows that meet anticipated expenditure, and a growth and income fund that seeks to maximise the longevity of investments as well as producing regular income streams to top up Part 1 and Part 2.

 Craig Massey, CEO of Sanlam Private Wealth commented:
 
“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, which is one of the reasons why we commissioned our own academic research. 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.
 
“One of our key beliefs is that the best retirement outcomes rise from taking a holistic view of a client’s invested capital. By considering all of their financial assets, we can create an approach that reflects the fact they will be drawing income from one source – most clients use ISAs, investment property and other types of capital in unison to generate income.”
 
Charles Brand, Head of Discretionary Portfolio Management, said:
 
“The Sanlam Retirement Income Service allows a portfolio to be unbundled between as many tax wrappers as needed. This ability allows us to choose and allocate assets that are ideally suited to both the pattern of income a client intends to draw as well as the tax treatment that each wrapper confers on them personally. This does not affect the cohesion of the portfolio, it simply reduces tax leakage with the intention of improving net-of-tax returns to clients.
 
“We are used to working with advisers to dovetail a bespoke retirement investment programme for clients’ financial strategies and particularly those who utilise cash flow planning as part of their advice to clients. The clear output of many of the systems used by such advisers can give helpful cues to us on how to match our strategy to their client’s income plans.”