Sanlam launches retirement income service


Wealth management firm Sanlam Private Wealth has launched a retirement income service aimed at helping clients manage longevity risks.

The service draws on research into longevity challenges and financial modelling and will be tailored to savers’ needs in retirement and their tax situation.

Sanlam says the structure of pension portfolios set up using the service broadly comprise three elements:

  • a liquidity fund for years one and two to meet immediate cashflow needs;
  • an asset matching fund for years three to five to produce expenditure-matching cashflows;
  • a growth and income fund for year five onwards designed to “maximise the longevity of investments” while also producing a regular income stream.

Sanlam Private Wealth chief executive Craig Massey says: “There has been a huge amount of research focusing on optimum investment strategies for the accumulation stage in an investor’s life, but very little on the topic of decumulation, which is one of the reasons why we commissioned our own academic research.

“One of the biggest challenges for our industry is how to manage drawdown money safely and sensibly for clients, particularly with the large number of retirees now opting for drawdown rather than taking annuities.”

SPW head of discretionary portfolio management Charles Brand adds: “The Sanlam Retirement Income Service allows a portfolio to be unbundled between as many tax wrappers as needed.

“This ability allows us to choose and allocate assets that are ideally suited to both the pattern of income a client intends to draw as well as the tax treatment that each wrapper confers on them personally. This does not affect the cohesion of the portfolio, it simply reduces tax leakage with the intention of improving net-of-tax returns to clients.”