Market Volatility Impacts Clients’ Retirement Planning

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Two thirds (67%)
of IFAs say the ongoing stock market volatility has spurred their clients into
changing the way they plan for their retirement, according to research* by MetLife
Europe Limited (MetLife).

One third (33%) of IFAs
say their clients are turning primarily to cash, but 21% say guaranteed pension
products are now top of the list for their clients. Another 13% say their clients
are switching into other assets such as property, despite the weakening market.

Nearly half of IFAs (45%)
say clients are increasingly asking for advice on alternatives to traditional
and drawdown annuities, including 16% who say clients ask primarily about pension
products with unit-linked guarantees, or variable annuities, while 29% cite
withprofits annuities and impaired life annuities as the most popular.

Dominic Grinstead, Strategic
Development and Marketing Director at MetLife Europe Limited, said: “Stock
market volatility and growing worries about inflation are raising the uncertainty
that clients and advisers face. So it is no surprise that pensions with unit-linked
guarantees are becoming more attractive as an alternative to traditional pension
products – they address inflation by facilitating exposure to equities, which
have an in-built defence against price rises in the long run, and protect pension
pots against stock market falls.”

To avoid confusion with
US products, MetLife has pioneered the use of the term ‘unit-linked guarantees’
to better describe the features offered. Unit-linked guarantees enable clients
to opt for a range of solutions to meet their retirement needs.

MetLife recently launched
the first personal pension to offer both capital and income guarantees as it
further enhances its reputation for innovating in the retirement market. The
NEW Retirement Portfolio provides unique guarantees which protect clients against
markets falling, locks-in gains when markets rise and guarantees income for
life. It provides a complete guarantee solution which integrates guarantees
into the mainstream of retirement planning with competitive charges.

The fully flexible personal
pension drawdown plan, which allows investors to future proof their savings
by opting into guarantees when required, builds on the success of MetLife’s
existing product range. MetLife believes the NEW Retirement Portfolio takes
the concept of unit-linked guarantees to a new level.

The NEW Retirement Portfolio
pioneers unit-linked guarantees by including an optional capital guarantee for
those saving for retirement, deferred income guarantee for clients looking to
delay taking an income and an income guarantee for those seeking an immediate
income. All the guarantees offer 100 per cent performance lock-ins every three
years. The product is available from age 23 and offers guarantees at charges
starting from just 0.5 per cent demonstrating the value of being able to protect
both income and capital MetLife’s NEW Retirement Portfolio is fully flexible
for retirement benefits offering the ability to consolidate, take full drawdown,
partial drawdown and phased drawdown. Clients can choose lump sum death benefits
if required and Auto-Fund Rebalancing on selected funds. Features include accepting
protected rights; the ability to make transfers, regular and single contributions
from employers and employees; and the ability to convert into a Self-Invested
Personal Pension later on.

The initial minimum investment
is £50,000 and clients have access to a range of MetLife Best of Breed
and Index funds, Managed and Index Portfolios chosen with the assistance of
leading independent investment research company Morningstar Associates Europe
Limited. Index Portfolios have annual management charges starting from 0.2%.

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