Product Allocation

To address these concerns, many advisors are beginning to recognize the importance of product allocation. Product allocation focuses on the types of products that retirees hold and how these products can work together to provide growth and guaranteed income for life.

Although there are a myriad of product choices available, they can be classified into three groups:

Systematic Withdrawal Plans (SWP)

Guaranteed Minimum Withdrawal Benefits (GMWB)

Immediate Annuities (IA)

Manulife is providing advisors with access to a proprietary tool that was developed in conjunction with Dr. Moshe Milevsky and the QWeMA Group in Toronto. Manulife′s product allocation tool will provide advisors with guidance on how much of their clients′ wealth should be allocated to each product category using unique mathematical algorithms. The product allocation process is not biased in favour of any single product category — rather it creates a recommended mix of products, based on a client′s financial situation. This can in turn be adjusted to meet individual retirement goals, concerns and preferences that will maximize the sustainability of their retirement income.

Retirement Sustainability Quotient (RSQ)

This exclusive product allocation tool calculates a Retirement Sustainability Quotient or RSQ, which is a percentage measure of how likely a mix of investment products will provide desired lifetime retirement income.

The RSQ can range from 0 per cent — which represents no potential for sustainability, to 100 per cent where the income stream is guaranteed for a lifetime. The higher the score, the better the chance of income sustainability. Using this convenient tool, it is possible to assess a client′s chances of success that their investment portfolio will provide an income stream that will last the rest of their life. The tool will also assist in developing a plan to optimize its RSQ by using a combination of investment products.

A shift in focus

A shift in focus

Hypothetical example. Not indicative of any portfolio.

Practice Management

Product_Allocation.jpg
pic_advisorAdvisor Opportunity

Why do you need to focus on Product Allocation?

Confidence_or_Uncertainty.jpgConfidence or Uncertainty

Are your clients approaching retirement with confidence or uncertainty?

 
 
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