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Making It Personal



Personalising advice for retirement planning is more efficient than ever with new products and tools designed for client-centric planning.

As people approach retirement, they are often confronted with a critical decision: how to use their accumulated retirement money to secure a sustainable income for their post-working years.

Traditionally, people grapple with the choice between a life annuity and a living annuity, each with its unique features and rules. Even if people decide to use some of their retirement money to purchase a life annuity and some to invest in a living annuity, they may end up with two separate retirement income products that can make managing their income during retirement difficult. However, a new generation of products is providing another option.

Finding the perfect blend

We believe there is a better way for financial advisers to help plan and structure their clients’ finances when they retire by blending the need for certainty and flexibility.

A financial adviser plays a vital role in guiding clients to make the best decision according to their unique circumstances and needs. The Income Illustrator is a tool that helps financial advisers personalise their financial advice when guiding clients on retirement income planning at retirement.

The enhanced Retirement Income Option – a living annuity product on the Momentum Wealth platform – seeks to revolutionise the retirement landscape. It allows advisers to help their clients seamlessly blend certainty and flexibility in one retirement income product, avoiding the complexity of managing separate income streams by better structuring their retirement income plans.

The cornerstone of this solution is the Guaranteed Annuity Portfolio (GAP), an optional investment component within the living annuity. By allocating a portion of their retirement money to this life annuity component, clients can customise their income plan, deciding how much to allocate to cover essential “life expenses” and how much to allocate for more flexible “living expenses”.

The Guaranteed Annuity Portfolio secures a guaranteed income for the client’s lifetime, providing the much-needed certainty they require in retirement. Simultaneously, clients retain investment flexibility to benefit from potential market growth and the possibility of leaving an inheritance – all in one living annuity.

Comparing scenarios

Using the Income Illustrator, advisers can compare different income scenarios to guide the decision about how much to allocate to the Guaranteed Annuity Portfolio to suit a client’s unique income requirements and circumstances. This tool gives financial advisers a powerful instrument to optimise their clients’ financial planning outcomes.

Financial advisers can use the tool’s scenario planning capability to explore tailored income scenarios, which is crucial for informed retirement planning decisions. Ensuring engagement over the long term enables ongoing support with asset allocation decisions and income management. Four key metrics provide comprehensive guidance, warning against aggressive drawdown rates and illustrating their effect on capital and longevity. Visualising retirement outcomes through user-friendly charts enhances understanding for clients. Financial advisers can use the Income Illustrator and the Retirement Income Option together with the Guaranteed Annuity Portfolio to help clients optimally manage retirement income, catering to changing needs. Accessible on VIA, Momentum’s intermediary workspace for financial advisers, it’s not just a tool but a strategic ally, enhancing the retirement planning expertise of financial advisers.

Recipe for success

Appropriately integrating a life annuity as an asset class within an investment portfolio introduces diversification benefits, mitigating longevity and market risks and aligning outcomes with a client’s inheritance needs. The Income Illustrator brings this research directly to financial advisers, enabling them to personalise their guidance on retirement income planning.

By blending the best of two worlds – the income certainty of a life annuity and the investment flexibility of a living annuity – financial advisers can empower clients to make informed decisions about structuring and implementing suitable income solutions in retirement for a secure and flexible financial future.