P1 partners with PIMCO to launch retirement-focused portfolio service

P1 Investment Management has announced a new partnership with PIMCO to launch a retirement-focused managed portfolio for UK financial advisers.

The range of portfolios combines P1’s discretionary management with PIMCO’s active fixed income and retirement income expertise.

The firms said funding retirement through natural income can not only provide retirees with sustainable income but also reduce client portfolios’ exposure to sequencing risk while preserving long-term growth potential.

The service is built around a different definition of risk from what typically governs model portfolio ranges used before retirement.

The models combine PIMCO’s active fixed income experience with passive equity exposure in a multi-manager framework. The portfolio AMC will be 0.15%, and the portfolios are available to UK financial advisers from 1 October via third-party platforms as well as the P1 platform.

Under the partnership, PIMCO will provide access to its UK retirement income model portfolios, underlying research and investment experience, while as the portfolio manager, P1 remains responsible for all day-to-day operations, investment decisions and client servicing.

Following the partnership, the existing P1 retirement income portfolios will be renamed PIMCO Retirement Income Portfolios with the MPC cost reducing from 20 bps to 15 bps.

Chief investment officer at P1, Will Dickson, stated: "Most retirement portfolios are still built the same way accumulation portfolios are, with risk defined by how much equity a client holds. This framing is not sufficient when clients start drawing an income.

"These portfolios represent an evolution in the approach to retirement income. The yield available at the point of retirement has historically been a very useful guide to sustainable spending. Incorporating income means clients are much less reliant on selling assets in falling markets, which is where many retirement plans come unstuck."

Simon Hillenbrand, head of global wealth management – UK at PIMCO, concluded: "Our partnership with P1 brings a decade of retirement income expertise built in the US markets, to UK advisers.

"Our Retirement Income Models are designed to give advisers access to a dedicated investment framework, balancing the need for income with the need for capital to keep working throughout retirement. They also reflect our long-standing conviction that active management can play a particularly important role in fixed income markets, where structural inefficiencies may create opportunities for active managers."

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