|
The Global Financial Crisis brought into sharp focus the risks faced by current and future retirees and the big impact that falls in investment values can have on current and hoped for lifestyles, as well as worry and stress.
However, the good news is that recent innovations by leading, secure financial service companies, can remove much of the risk and the associated worry.
The innovations take the form of new products, introduced by ING and AXA.
We anticipate that these will be attractive to many people. Please contact us for more details, or to discuss your overall position.
While new to Australia, similar products have been available for some years in Europe and North America.
Looking (briefly) at each of them.
ING MONEY FOR LIFE
This product provides a guaranteed income for the life of the investor (and his/her partner, if required).
The level of income may rise (if investment markets rise) but will never fall (even if markets fall, or money runs out).
You also have access to capital (if any) but this will reduce the guaranteed income. There is no loss of capital on death.
In some respects the ING Money For Life is like an old style annuity – it provides an income for life. In other respects, it differs markedly from annuities.
- There is no loss of capital on death
- You can make capital withdrawals
- Income may rise (if markets rise)
- It is far more flexible and transparent than annuities
- There is a choice of investment options. You are not locked into low yielding, defensive investments, but can choose to have some money invested in potentially higher returning growth assets.
AXA NORTH
The AXA North product provides a guarantee of capital.
There are two types of guarantee to choose from. One guarantees the initial capital, while the other provides a rising guarantee, as markets rise.
Also, there is flexibility in investment choice and you are not restricted to low yielding, defensive investments.
SUMMARY
In all the time I have been in this industry (which is over 25 years) there have been attempts to come up with investments that provide certainty to investors and remove some or all of the downside. Most have failed for a variety of reasons (too expensive, too inflexible, loss of capital on death, too opaque – are some of the reasons).
These two are the first I have seen, which I believe offer investors what they want, at a reasonable price, with flexibility and transparency.
If you would like more details or would like to discuss your situation, please contact us.
GENERAL ADVICE WARNING
Please note that any recommendations do not take full account of all of your circumstances and you should decide whether or not they are appropriate for you before deciding to act. Any decision to act should only be made after reading the relevant Product Disclosure Statement (PDS). You can obtain copies of the PDS from us.
|
