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Vitality launches in-house funds in health investment push

Vitality InvestVitality has entered the investment and platform markets in a bid to encourage healthier lifestyles through financial incentives. The health insurer has set up a new company, Vitality Invest, to run its own funds and investment platform for the first time.

In an adviser-only offering, it is attempting to provide additional incentives to investors who make efforts to become and stay healthy.

To try and get people saving sooner, every five years an investor remains in Vitality funds, they will receive an additional top up to their savings, this scales from 2 per cent to 4 per cent per five-year period, providing a maximum cumulative investment uplift of 21 per cent if invested for 30 years.

Savers could also see administration charges across Vitality funds reduced if they follow a healthy lifestyle programme and progress through Vitality’s membership rankings.

For example, on a £250,000 to £500,000 pot that would normally charge 0.2 per cent, this would reduce to 0.15 for a silver status holder and be waived for platinum members.

Clients will need to sign up to a Vitality life or health insurance product so their health is monitored and they meet personalised plan objectives in order to access these benefits.

Through its main investment partner Investec Asset Management, Vitality is offering a range of active risk-managed funds, with an overall charge figure of between 88 and 103 basis points.

For passives, it is employing Vanguard as an underlying manager with Dynamic Planner risk mapping. The annual management charge and ongoing charges figure will be the same at 40 basis points.

Finally, in drawdown, Vitality is attempting to offer an incentive to clients not to draw down too much income too fast and to stay healthy. If they draw down less than 1 per cent in one year, platinum status holders can receive a top up of an additional 50 per cent of that amount.

For those drawing between 3 and 4 per cent, additional benefits on that income range from 4 per cent for bronze members to 15 per cent for platinum members.

Advisers will be able to manage clients’ investments and lifestyle progress through a new GBST-powered Vitality platform.

VitalityLife chief executive Herschel Mayers tells Money Marketing the firm spent around £15m developing its new investment arm. The firm intends to hire 60 new business development staff across the UK to work with advisers on the offering.

He says: “This is a totally new, unique concept, combining wellness and health into financial planning…The way we manage our health is such an integral part of our life, I don’t think you can divorce management of health from the management of finances.”


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There is one comment at the moment, we would love to hear your opinion too.

  1. ‘Without Health you don’t have Wealth’…… the two are intrinsically linked and it’s great to see Vitality incentivise long term investment and greater wealth needed for a longer, healthier life….. something most of us aspire too. Take note industry, this is going to shake up rather formulaic approach.

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