The GRIPs were launched before Pensions Freedoms and were originally designed for drawdown customers who would eventually purchase an annuity. Now that there are fewer customers buying an annuity, we have tweaked our GRIPs to also help customers who choose drawdown for life.
A broader mix of assets also means the GRIPs should be more resilient to market shocks, and can benefit further from Royal London Asset Management’s (RLAM) increased multi asset capability.
The changes include allocations to our new wider range of asset classes that have recently been introduced to our Governed Portfolios- in particular allocations to commodities, gilts and absolute return strategies including cash.
What’s more, we’ll continue to apply a tactical overlay to the portfolios which is managed by Trevor Greetham, Head of Multi Asset at RLAM, with the aim of adding value over and above the strategic asset allocation by making short-term tweaks to the investment mix.
We are also introducing new risk metrics which focus on income sustainability and monitor the probability of each GRIP sustaining customers’ retirement income. Sequencing risk remains a valid concern for any drawdown customer, and we believe this concern is best tackled by actively managing sustainability with regular adviser reviews throughout the retirement journey using our Drawdown Governance Service (DGS).
These updates have been reviewed and approved by our Investment Advisory Committee (IAC), and is an example of our ongoing investment governance intended to deliver better outcomes for customers.
The new strategic asset allocations were made in mid-October. Tactical asset allocations will be shown on the relevant factsheet as and when the changes are made.
Please speak to your usual Royal London contact about the changes.