The product could range from a simple combination of annuities, for example, inflation-linked, level and with-profits, to one that includes income drawdown, variable annuities and fixed-term annuities, depending on the client’s needs.
Partner Billy Burrows says the basic rule of investment, that you do not put all your eggs in one basket, also applies to annuities.
He says: “The dilemma for individuals is they are facing a number of different risks at retirement. They do not know whether inflation is going to be low or high and they do not know whether the stockmarket is good or bad.
“A combination of annuities is looking at spreading their individual risk and it also recognises that conventional annuities are increasingly offering poorer value to the Middle Britain cohort as things like postcode annuities and Solvency II have an impact.”
The product will be available to Burrows & Cummins’ clients in the new year although the company plans to roll it out to other IFAs as soon as possible.
Annuity Portal managing director Malcolm Thomas says: “A conventional annuity locks you in but circumstances may change. This product would allow you to cover your expenses with a guaranteed annuity while also taking more investment risk to get a higher return or more flexibility in future.”