ARTICLE 50 TRIGGER 'INCREASES DRAWDOWN RISKS'
April 05, 2017
- Three out of four advisers fear uncertainty will hit drawdown customers
- Two out of three advisers forecast a Brexit investment advice boom and half urge clients to Brexit-proof ISAs
The triggering of Article 50 is increasing the risks for retirement savers relying on traditional drawdown, new adviser research* from MetLife shows.
Investment market uncertainty during the two-year Brexit process, now underway following the formal triggering of Article 50, is a major concern for three out of four (74%) of advisers. This is equal to worries about clients underestimating longevity.
The potential implications of Brexit on investment returns from all asset classes is seen as the biggest challenge for investment planning ahead of general volatility and the short-term impact of European elections this year.
Around 74% of advisers identified Brexit issues as the biggest challenge, ahead of 58% who focused on volatility and 50% who are worried about the market impact of elections in the Netherlands, France and Germany this year.
However the MetLife research shows advisers believe Brexit will be good for their businesses – 67% of those questioned expect demand for Brexit-related advice will increase this year.
The research – conducted as part of MetLife's Quarterly Market Review being distributed to advisers – found advisers are optimistic for business in general this year. Around 68% are optimistic about business and 56% expect to recruit advisers.
Richard Evans, Intermediary Development Manager at MetLife UK said: "Equity markets have been buoyant since the EU Referendum result with the FTSE-100 up more than 16% since June 23rd.
"However the formal triggering of Article 50 means the Brexit process is now real with the clock ticking on the UK's departure from the European Union which potentially heightens sensitivity to the twists and turns of negotiations".
"Advisers are clearly concerned that clients in traditional drawdown are exposed to volatility and uncertainty and believe Brexit is as much of a risk as longevity. The market boom since the Referendum has benefited clients but it may now be time to look at guaranteed solutions as a way to protect those gains."
MetLife's range of retirement and investment solutions have been designed to meet the need for a guaranteed level of income for life in retirement or a guaranteed capital amount at the end of a chosen term, while providing customers with the flexibility to access their investment if needed.
Customers can choose from a range of investments to build a personalised plan suited to the levels of risk they are willing to take, while having the choice of a valuable guaranteed level of income for life from age 55 or a guaranteed capital sum at the end of their chosen term. In addition, the plans offer the potential for customers to increase the value of their guarantee through daily lock-ins of investment gains while enabling savers with the flexibility to start, stop and restart their income to suit their personal needs.
Notes to Editors
- Research carried out by Pollright among a sample of 206 specialist retirement advisers in January 2017
The value of your client's investment, and any income taken from it, can go down as well as up and they may get back less than they invested.
The MetLife Secure Capital Option provides a guaranteed death benefit or amount at the end of a chosen term. If your clients switch out or cash in their investment before the end of this term, they will receive the underlying value of their investment.
The MetLife Secure Income Option provides a guaranteed level of income for life and death benefit. If your clients switch out or cash in their investment they will receive the underlying value of their investment.
Tax treatment depends on your clients individual circumstances and may be subject to change in the future, with or without notice.
The references to "MetLife" are general references to the group as a whole and not to specific entities within the group. MetLife in the UK comprises a number of different companies.
MetLife Europe d.a.c. is an Irish insurance company based in Dublin with Dirk Ostijn as Chief Executive Officer. MetLife Europe d.a.c. provides financial products into the UK via its UK branch, of which Dominic Grinstead is the branch manager.
MetLife Europe Services Limited is an Irish services company, which distributes MetLife Europe d.a.c.'s products to Independent Financial Advisers via its UK branch. Key personnel within the UK branch of MetLife Europe Services Limited are Simon Massey, Wealth Management Director, Tom Gaynor, Employee Benefits Director and Claire Oldstein, Marketing Director.
MetLife Europe d.a.c. (415123) and MetLife Europe Services Limited (472359) are incorporated in Ireland and are authorised by the Central Bank of Ireland and subject to limited regulation by the UK Financial Conduct Authority and Prudential Regulation Authority. The registered address of both companies is 20 on Hatch, Lower Hatch Street, Dublin 2, Ireland and the UK branch address for both companies is One Canada Square, Canary Wharf, London E14 5AA. Website: http://www.metlife.co.uk
MetLife Europe d.a.c. is affiliated with US-based MetLife, Inc. (NYSE: MET), which through its subsidiaries and affiliates (“MetLife”), is one of the largest life insurance companies in the world. Founded in 1868, MetLife is a global provider of life insurance, annuities, employee benefits and asset management. Serving approximately 100 million customers, MetLife has operations in nearly 50 countries and holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit www.metlife.com.