• Three out of four advisers would consider guarantees for ISA clients ahead of retirement
• Advisers back new Guaranteed ISA category to boost long-term saving
Nearly three out of four advisers (73%) will consider recommending clients move ISA investments into guaranteed products ahead of retirement to protect them from volatility, the nationwide study found.
Advisers are seeing increased interest from clients in investing in ISAs as part of their retirement income – nearly half of advisers say their clients are now focused on making ISA investments part of their total retirement planning following new pension rules.
However there is concern about a lack of options suitable for retirement saving among current ISA options – around 75% of advisers say there needs to be more innovation in the ISA market to encourage long-term saving.
One idea which has widespread support is the launch of a new Guaranteed ISA category to sit alongside cash ISAs, stocks and shares ISAs and the planned Innovative Finance ISA – 73% of advisers would support the creation of a Guaranteed ISA category.
Simon Massey, Wealth Management Director, MetLife UK said: “ISAs are a major part of retirement planning as the market adapts to pension freedoms and changes to rules on tax relief and the lifetime allowance.
“However the risks from volatility are a major concern and there needs to be solutions which help advisers and clients to risk-proof investments while still benefiting from the potential for investment growth in the run-up to retirement.
“Time in the markets is vital for building wealth but timing is important and the interest in transferring into guaranteed products demonstrates there is a debate to be had on how ISA investments are protected in the run-up to retirement.”
MetLife’s Guaranteed ISA offers the choice of income or capital guarantees to deliver increased certainty and flexibility for savers.
The income guarantee takes MetLife’s unique daily lock-ins with a market-leading guaranteed income deferral rate of 5% into the ISA market, enabling savers to access tax-free income.
Customers using the capital guarantees are protected against market falls and have the certainty of a guaranteed amount at the end of their chosen term.
Both guarantee options offer daily lock-ins which can provide a real solution for volatility worries as investors can benefit from the potential stock market gains while being protected from falls. Any increase in the value of a client’s investment above their existing guarantee is locked-in daily.
MetLife has developed its innovative Active Asset Allocation which invests in a combination of the MetLife BlackRock Global Growth Fund and a range of MetLife Fidelity Corporate Bond Funds.
Guarantee charges start from 0.6% on the Secure Income Option and 0.3% on the Secure Capital Option. MetLife’s Active Asset Allocation has a total expense ratio of 0.55%. The annual management charge for the ISA Portfolio ranges from 0.7% to 0.4% depending on the value of the investment. The initial minimum investment in the Guaranteed ISA is £15,000.
|
