Aegon to add portfolio feature to platform

Aegon to add portfolio feature to platform

Aegon is developing a function on its platform to allow financial advisers to put clients into different model portfolios within the same tax wrapper, allowing for a 'bucket' approach to retirement planning.

A company representative said the service, which is not currently offered, is something presently being worked on, but declined to specify a timeline. 

The spokesman said: “Our focus remains on developing the platform and we’re listening and involving advisers so we can prioritise developments in the right order.”

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Many platforms already offer this function, which helps advisers organise their clients' pension investments in a number of 'buckets' with different priorities, while keeping the returns on the assets free from tax. 

Mike Barrett, consultant at the Lang Cat, said: “A client might for example have their assets divided into three buckets, with one containing the cash they need for day to day living now, one bucket containing the emergency rainy day cash, and one bucket with more aggressive investments for the future.

"As people live longer this is likely to be a growing trend.”

Among the platforms that already offer this service are Ascentric, Zurich, Transact and both of the Standard Life owned platforms, Wrap and Elevate. The Fidelity Fundsnetwork platform allows clients to split the tax wrapper across many different model portfolios in “most cases”.

A representative of Standard Life said the flexibility "supports the adviser meet clients investment requirements whether in accumulation or retirement".

Where platforms don't offer the service advisers have found other ways to meet their clients' goals but some believe more flexible functionality is becoming increasingly important.

Alan Chan, an adviser at IFS wealth and pensions in London, said: “I believe it will be important for platforms to allow more than one model portfolio in a wrapper. 

"This is important to cater for different goals for clients and particularly for those clients in decumulation. 

"Our main platform, Transact, allows us to segment each wrapper to cater for multiple portfolios. This means we can segment their incomes for the next 1-3 years in a different model portfolio geared for income purposes and the remainder funds in a growth portfolio.” 

Alastair Cunningham, financial planning director at Wingate Financial Planning in Surrey, said: “We use one platform that allows multiple models and one that doesn’t.

"The one that doesn’t needs a few more tweaks, spreadsheets, and manual work arounds, but it’s always possible as long as the funds are available – which on a modern platform they are, but maybe not on an old fashioned pension.” 

Martin Bamford, managing director at Informed Choice Financial Planning in Surrey, said:  “We use our model portfolios as a starting point for individual clients, so we can build bespoke models to perfectly suit individual requirements.

"This means that if a selected platform will only allow us to run one model within a tax wrapper, we can tailor that model to combine different objectives. That would be unusual though."