The JFM Income Drawdown Plan is a capped drawdown product, which has been designed to offer maximum simplicity and flexibility, with no administration or set-up fees. JFM believes the new product will be popular with advisers, enabling them to offer a straight-forward solution to clients that can be tailored to individual circumstances.
As well as having no exit charges and set-up or review fees, the JFM Income Drawdown Plan includes a choice of investment funds and a range of risk-rated portfolios, specifically designed for income drawdown. On top of this, the product also includes automatic portfolio re-balancing, removing some of the burden on advisers.
Figures from the Association of British Insurers show that almost 9,500 income drawdown contracts were agreed in the second quarter of 2014 compared to 5,476 in the same period last year. Advisers have rated income drawdown as a major business opportunity.
JFM’s drawdown product has a low minimum initial investment, set at £25,000 in pension savings after tax-free cash and any initial adviser charges. JFM believes this will help advisers capitalise by opening the door to income drawdown to many customers who have struggled to find a suitable solution.
David Hughes, managing director at JFM said:
“We have designed this capped income drawdown product with both advisers and their clients in mind. Often with greater flexibility comes extra complexity and we have tried to address that by designing a simple, low-cost product that clients want and that advisers can sell.
“We know that income drawdown is popular with clients and that is set to increase next year. Advisers will have a crucial role in navigating their customers through the changes and identifying the best options for them.
“With our drawdown portfolios, customers benefit from in-built fund diversification and automatic quarterly re-balancing. This automatic re-balancing of funds maintains the suitability of the product for the customer, ensuring they retain the same level of risk and investment objective.”
With further changes to pension legislation being introduced in April 2015, this capped income drawdown plan is the first in a range of products that JFM is designing to ensure that advisers can take full advantage of the opportunity.
