Governance offering included in new enhanced Scottish Life pension range

Scottish Life is launching an enhanced investment proposition that offers a level of governance, flexible asset allocation and risk profiling all within the price of its existing group pension plans.

The core Governed Range offers nine risk-graded portfolios as well as a choice of fixed or flexible lifestyle strategies. The life office says it is particularly suited to IFAs who are interested in getting support to help deliver quality investment advice within a framework that matches their TCF requirements and responds to the Pension Regulator’s call for greater governance of contract-based DC schemes.

The new product includes a wider range of risk-profiled portfolios, designed to match individuals’ attitude to risk more closely, so helping with TCF compliance. It also allows advisers to tailor solutions for specific client needs and offers comprehensive ongoing governance at no
extra cost.

It argues that the launch marks new ground for life offices in enabling advisers to offer governance based on expert research, asset allocation and investment rebalancing within an affordable package.

The Governed Range incorporates a wide range of risk-profiled portfolios, refinements to the asset allocation process, automatic monthly portfolio rebalancing, increased flexibility for lifestyling towards the planned retirement age and increased range of risk/lifestyle options.

Scottish Life’s new Custom Range allows pensions to operate on autopilot through their working lifetime, and incorporates a straightforward three-step process to build a custom lifestyle strategy.

Scottish Life says that the developments have involved a considerable amount of discussion with advisers. In particular it has been developed in relation to the recent FSA letter, ‘Pension Switching Advice’ sent out in December. The insurer points to the FSA’s requirement that “Where an ‘asset allocation’ approach has been recommended, the scheme needs to be reviewed periodically, and rebalanced where necessary, to ensure it continues to be suitable”.

Both ranges offer a choice of 56 equity funds from a total of 17 management houses. The pension can be stakeholderfriendly depending on which funds are selected. Scottish Life says the two new offerings allow advisers to continue to add value in a way that will mean they will not be in breach of the Retail Distribution Review if they take a recurring income because asset allocation will be down to them.

Nick Leitch, head of investment marketing at Scottish Life, says: “The challenge we gave ourselves was quite simple – to design and deliver an investment proposition for pensions which is market-leading in terms of flexibility, functionality and value. The new Governed Range emphasises the crucial importance we attach to strong ongoing governance in all respects.”

“We worked closely with leading consultancy Barrie & Hibbert, to develop the risk-profiled portfolios and associated governance process. And a new riskprofiling tool was developed for us by leading academics Alistair Byrne and Professor David Blake of the Pensions Institute.”