Quilter Investors is pushing further into decumulation as it appoints Helen Bradshaw to lead the development of a new multi-asset income range, but experts say the firm is just “playing catch up”.
Bradshaw (pictured) joins from Janus Henderson where she was a multi-asset fund manager.
At Quilter Investors, she will develop an multi-asset income range beginning with two products to be launched in summer 2019.
A spokesperson told Portfolio Adviser the range will target retirees, albeit not exclusively. “The forthcoming portfolio launch will expand our offering to those clients with a preference for natural yield, including those in retirement or phasing into retirement as well as those wishing to supplement income during their working lives.”
The portfolios will hold external fund managers, derivatives, direct investment in equities and fixed income, alternatives and investment trusts.
Rivals
Standard Life has had a similar Myfolio income fund since around 2011, managed by Bambos Hambi, and so does Hargreaves Lansdown, according to Gavin Fielding, editorial director at Fundscape.
“It will take three years to get any relevant past performance. I think Quilter Investors are playing catch up here,” Fielding said.
Nonetheless, he felt the launch made sense. “Most of what we do as an industry is geared towards accumulation, but as the population ages there will be more pressing need for better decumulation service and that means income generation.” He said Quilter Investors was likely reacting to adviser demand and noted that income fund management requires specific skills and techniques.
Quilter Investors responded that its proposition includes an existing offering for clients who need to take income from capital and that the latest launch expands that to a natural yield product.
Suitable for clients with simple income needs
Quilter Investors said the portfolios will be distributed through financial advisers and will be available through Quilter’s own UK investment platform, as well as other third-party platforms.
Fielding added: “If you operate a vertically integrated distribution model you do need to make sure that all the main bases are covered. My guess is that the price will be keen especially for Quilter Investors supporters.”
He thought the single fund-of-funds solution would appeal to advisers whose clients have simple income requirements and where portfolio size does not merit the additional costs of running a sophisticated income strategy. It is less flexible but lower cost than alternatives, he added. “A lot of advisers are going to make up a portfolio or use a DFM managed one; they will also manage drawdown to mitigate sequence risk.”
Quilter Investors said it is in the process of designing the new range and expects to initially launch two risk-targeted multi-asset portfolios in summer 2019.
Further details on the design and specifications of the portfolios, their aims and objectives, IA sector classifications, name & branding, and investment toolkit will be announced later in the year.
Bradshaw said she looked forward to creating a product for an environment where global central banks are tightening money supply and raising rates and the search for income is set to shift materially.
Quilter Investors chief commercial officer Dean Bowden said Bradshaw has extensive experience managing income solutions for advised customers.
