Some are hangovers from last year, albeit slightly more defined: interest rates will not rise in the UK until 2016 though the US may put up rates towards the end of this year; oil is still around the sub-$50 a barrel mark but its price remains fairly static.
Some are hangovers from last year, and horrendously more defined: the terrorist attacks in Paris (Je suis Charlie) and Nigeria (by Boko Haram) for example.
Some are hangovers from last year but no more clearly defined at all: the UK General Election will result in a coalition government but who knows which minority party will hold the controlling votes.
Some are brand new hangovers: the Swiss National Bank removed its currency’s peg to the euro; Europe’s Central Bank introduced its own QE; a new ruling monarch in Saudi Arabia and the unknowns that this brings.
And then there are the oft-felt hangovers at the start of every New Year: new product launches; new careers and employers for many; the impact of legislation and regulation coming that much closer.
Two in this final category collide nicely and will drive a great deal of investment debate in the coming months with new products being launched ahead of the new pension legislation about to kick in.
Money Advice Service has even introduced a new Retirement Adviser Directory because, as Tom McPhail, head of pensions’ research at Hargreaves Lansdown, described: “'It has long been recognised that many pension investors will want help in finding the right retirement income to meet their particular needs.”
The emphasis – for McPhail, the Money Advice Service, annuity providers, fund groups, individual investors, wealth managers et al – is now on retirement income given the removal of the requirement to buy an annuity with assets built up in a pension product.
The product answer, for the time being anyway, is a variation on the multi-asset theme.
The most recent developments in this arena are BNY Mellon Investment Management launching, on 4 February, a multi-asset income fund as “as the firm seeks to capitalise on client demand stemming from the changing pensions landscape” according to Portfolio Adviser reporter Sean Butters when he covered the launch.
Fergus McCarthy, BNY Mellon IM co-head of UK intermediary distribution, said: “Given the recent changes to the UK pension landscape, we are seeing significant and growing client demand for multi-asset investment solutions that can provide a sustainable income while also providing the potential for capital growth over the long term.”
BlackRock has rejigged its Global Multi Asset Income Fund in response to “the growing demand for products that deliver a consistent income” – i.e. in response to one of the key requirements for an individual as they approach and enter retirement.
Asset allocation specialist Trevor Greetham has left Fidelity for Royal London Asset Management to head up the firm’s continued push into the multi-asset world. Commentators on his move have again pointed out the multi-asset opportunities that the announcements in last year’s Budget made clear.
The question for individuals approaching retirement is still the same: ‘How do I ensure an income when I stop working?’. The answer for many will remain to buy an annuity, but for those with a significant pot of cash built up – the preferred market of wealth managers and fund groups – the answer will be to invest in a multi-asset fund, built largely of securities, or a fund of funds, or manager of managers, or risk-based proposition, or a target-dated solution…it is already a crowded house.
The question for fund groups and wealth managers is: ’Do I run my own proposition or do I outsource?’ and they will have to find the answer sooner rather than later or the question they will have to find the answer to is: ‘Why are you spending so much time at home, dear?’.
