Our governance process

Good governance is essential in delivering good customer outcomes and helping your clients achieve their long-term investment goals.

Design of our Governed Range

The strategic asset allocation (SAA) represents our long-term view of an efficient asset mix for each portfolio. The Investment Advisory Committee (IAC) monitor how the portfolios are delivering against their risk objectives every quarter, as well as carrying out a formal review every three years.

The formal review ensures that portfolios remain appropriate for their long-term objectives which are designed to optimise returns within their risk framework.

SAA objective and approach

Each portfolio has real return objectives and are designed around a risk target framework where risk metrics are based on the objective of each portfolio.

The objective of the review is to improve long-term outcomes for your clients. The IAC review expected risk, return and correlations for each asset class in order to identify the most efficient mix going forward for the longer term.

SAA process

The long-term expected return, volatility and correlation assumptions we use are based on Moody’s Analytics capital market assumptions which are then overlaid with a Royal London house view.

Each asset class has a set of assumptions that reflect our expectations of risk, return and how they move in relation to one another. These assumptions determine the risk return trade-off for each asset class.

The next stage of the process is to review and test the current SAAs against hundreds of potential other combinations of portfolios over thousands of different future scenarios working with the assumptions Moody's Analytics have provided.

This helps us identify which asset allocation offers the best potential performance for the level of risk taken in each portfolio and the best risk return trade-off.

Investment expertise and governance

Discover more about our independently-led guidance and oversight.

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IAC minutes

View our IAC minutes to find out what we're talking about and any decisions we've made.

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This website is intended for financial advisers only and shouldn't be relied upon by any other person. If you are not an adviser please visit royallondon.com.

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.