LV has launched a smoothed pension to complement its range of smoothed managed funds, aimed at cautious investors.
The aim of the smoothed pension is to reduce short-term market volatility, with LV allowing smoothing to begin from the second day of investment, gradually averaging daily unit prices up to 26 weeks.
David Stevens, retirement director at LV, said: “Many savers have felt the effects of volatile stock markets over the past 18 months on their pension pots.
“We have listened to feedback from financial advisers and their clients to increase the appeal of these funds even further, so that the benefits of smoothing starts working from day two of investment instead of 26 weeks through our gradual smoothing mechanism.”
It comes after LV launched a trustee investment plan in October, which offers the same gradual smoothing mechanism after two days and can be held as part of a self-invested personal pension (Sipp) or small self-administered scheme (Ssas).
LV has also adapted its tiered charging structure and now includes aggregated fund discounts based on holdings across multiple LV smoothed managed funds
Clients holding more than £100,000 are eligible for discounts of 0.05 per cent, increasing to 0.15 per cent based on the total amount invested.
Charges will be reduced from 0.9 per cent to 0.75 per cent for investments over £500,000.
The range of funds includes three global multi-asset funds: cautious, balanced and growth – which are risk-rated as 3, 4 and 5 respectively by market analysts Defaqto and Distribution Technology.
A 10-year guarantee option is available for the smoothed managed cautious pension fund.
Funds are managed by Columbia Threadneedle Investments to a mandate set by LV.
Stevens said: “LV research found that mass affluent savers are twice as likely (11 per cent) as the general public (5 per cent) to be worried about the volatility of the stock market.
“Our unique smoothing mechanism and optional guarantees are appealing to investors as our smoothing mechanism has withstood market volatility for over ten years.”
amy.austin@ft.com
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