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FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC.

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Presentation on theme: "FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC."— Presentation transcript:

1 FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. Santander Asset Management Simon Durling Investment Product Specialist Enabling Savers and Investors to Understand Risk April 2014

2 FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. 2 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

3 FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. 3 Pension Institute report (December 2013)

4 FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. 4 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

5 FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. 5 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

6 FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. 6 The Pension Institute report – What this means for providers BeforeToday  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

7 FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. 7 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

8 FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. 8 “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 OpportunityChallenges  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

9 FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. 9 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

10 FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. 10 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)

11 FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. FOR INTERMEDIARIES AND INVESTMENT PROFESSIONALS ONLY. NOT FOR PUBLIC DISTRIBUTION. 11 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

12 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 and respectively. Telephone 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.


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