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Featured video - LV= Doctors Services

Video transcript

The LV= Doctor Services app helps you look after your health.

Whatever your medical concern.
Wherever you are.

Download the free LV= Doctor Services app from your usual app store.

Enter your email address and password to log on and complete a few personal details to get started.

LV= Doctor Services gives you fast, convenient access to thee expert medical services.

Let's take a look.

Remote GP

Book a GP consultation to talk to a UK based doctor over the phone or video.

You can also chose the gender of your doctor you're most comfortable with.

Choose the time that suits you and find out more about your doctor before your appointment.

You'll receive an email confirmation as well as a reminder in the app itself.

Remote GP allows you to see a doctor through your phone wherever you are.

Prescription Services

If your doctor recommends a course a of treatment you'll be offered a private prescription.

Your private prescription will be emailed or sent to your pharmacy within 1-2 hours.

Second Opinion

Get a second opinion if you're worried or unsure about a confirmed diagnosis... whatever the condition.

You'll need your medical records. But don't worry - the app will guide you through how to do this.

Speak to a UK based medical specialist best matched to your diagnosis.

Helping you make a well-informed decision about your health.

Income Protection: Customer Story


My name’s Chris Nicolaou. I’m a managing director at a mortgage brokers in Hampshire.

I’m married with three children, two of them pretty much left home, one’s still hanging on in there.

I took out an income protection policy some years ago. I took it out really to run along side my life and critical illness policy. It seemed a good idea that if something was going to pay a lump sum to pay of the mortgage off and I still wasn’t working, it made sense to keep the income coming in – cash being king at the end of the day.

My main hobby is motorbikes. The wife hates them. But it was something I’ve done as a little kid, always have done, and done hundreds of thousands of miles on these things.

It was a normal day, out with friends. Wife funnily enough had just come home from work, she runs her own business, she’d just came home from work . So said a quick goodbye, went up the road on the bike and we went off. It was a beautiful sunny evening, on a Wednesday, just outside of Guilford and then the dreaded thing happened where you are on a position where you’ve come of the motorbike and done a lot of damage. Air ambulances and ambulance and police and everything, it was a horrendous accident. Ended up breaking both my legs. Got rushed into St George’s hospital. The trauma ward there were fantastic, absolutely brilliant but they weren’t sure if they were going to save one of my legs, which was quite worrying at the time. But they managed to put me back together. From there I went over to, that was St Georges in Tooting, from there I was transferred to Parkside private hospital in Wimbledon, where the surgeon took a look and I think he quite enjoyed the fact that this is going to take some putting back together. We had pins and new ligaments put in that they grew from stem cells and they just did a fantastic job.

I had seven operations in all, in and out of hospital really for the last eighteen months, last one was last November, sorry last September was my last operation and all being well that should be it for now apart from physio.

One thing I didn’t know was that the NHS will not help when it comes to physio and the costs of it.

The claims process was fantastic with LV=. We had a claims manager who looked after me, he told me the information that was required and we sent it in and he basically looked after me all the way through. If I had any questions he was always on the other end of the phone. It was just nice to deal with a person as apposed to a computer system that may have said yes or no.

I would advice any adviser, to talk about this more to their clients. It’s so important to actually have this policy in place. I think what we’ve done in the past is maybe looked at critical illness and that’s used up the budget, and because of that the income protection side has fallen by the wayside. But we are there to advise our clients because our clients don’t know what they don’t know. And if they need to find just a few more pounds just to put something in place, whether it be the budget or full blown IP, Income Protection plan, then we need to be talking to our clients about it and let them make the decision as to say ‘well no, I don’t want this’ as apposed to us not talking about it.

What I would say to other advisers is just run through, perhaps show them this story. Just show that things can go wrong and they go wrong really quickly – there’s no lead up of it will happen tomorrow or next week, it just happens and it happens in a flash! And all of a sudden your life is upside down, so talk to your clients about it.

Income Protection: Objection Handling


If you’ve not got income protection, take it! It really is the most important thing.

Well I’m Chris Nicolaou. I’m a managing director of a mortgage brokers in Hampshire.

You know things can go wrong, and they go wrong really quickly. There’s no lead up of it will happen tomorrow or next week – it just happens and it happens in a flash and all of a sudden your life is upside down. So talk to your clients about it.

One thing you don’t this is that it’s going to happen to you so you always think it’s other people, and ‘I don’t get ill’, ‘I’m not going to have an accident’, ‘what’s the chances are?’ and I think the same, I thought the same. You know it’s one these policies I left and I thought, ‘shall I keep it going?’ ‘I thought, oh well, it’s not overly expensive, we’ll leave it there.’ And blimey! It was such a life saver to have it.

I’ve ridden a motorbike, it’s just for fun, it’s a toy, and I’ve had them for years, done hundreds of thousands of miles on these things and we were out on a Wednesday evening. Beautiful summers day with friends and it was one of those days that all of a sudden change your life.

It does happen, things do go wrong and when they go wrong the first thing that gets hit, apart from obviously the family life, is the income. It needs protecting!

And when I actually took the income protection out, one of the things that I did really, was that I took out just enough – so I didn’t take out as much as I could, but I took out enough to see me through. But it paid the bills and it kept the family unit safe.

So all insurance comes with a cost but sometimes I think ‘well it’s maybe easier to find a few pounds a month for an income protection policy than trying to find a mortgage payment when you’re not earning.

Had I taken out the budget income protection that would have paid me for two years, well I claimed on mine for 18 months, so it would have fitted that. However, if my operation had gone slightly the wrong way, I could have claimed on it to the age of 65, but it’s worth having quotes on both.

I wasn’t surprised I didn’t get any state benefits because the state benefits are really non-existent and if they are there, it’s such a small amount of money.

If you’re employed, I think it’s normally three months or six months full pay, then half pay – it will stop after a time. One of the LV= obviously you can always use the deferred periods to match that and then it’s down to company discretion. I don’t know many employers that will actually pay when they don’t have too.

One of the things with any income protection, one of the myths are they don’t pay out, they do! And over 90% of the time. I know that because I’m in the industry. But you do still have that little bit of worry when you put a claim in, ‘I wonder?’ But LV= did, they did what they said they would do and they continue to do that.

When you start to recover, a lot of people said to me in the past, ‘well as long as I can pick up the phone, I can run my business’. I thought that myself. I can still speak to my clients, so long as I have a use of an arm and talk, everything will be well. That’s just so not the case. When you’re on a huge amount of painkillers, morphine, such like, just to keep the pain at ease, you’re in a position where you cant actually focus that well.

My wife ended up taking some time off to look after me. I had to get different things in the house because I was in a wheelchair for several months. So by the time you get a hospital bed downstairs, that was about £1000 to hire, and then about £200 a week to hire. And then plus all the other bits: I had to buy a wheelchair, ramps to be able to get outside in the case of emergencies. All these extra costs and the impact that has when your not earning any money, the impact that has on the business as well as your savings - you know the bit you actually get from somebody like LV= is an absolute lifesaver because it just tops up, it makes up that bit where you would really eat into your savings and so quickly.

I still look back at the policies we’ve sold and it’s so heavily weighted towards the life and critical illness side of things and really talk about income protection as almost like an add on to that. Almost to a degree that it’s almost an afterthought. Actually it should be so the other way around. In an ideal position like I was, I had the life and critical illness and the income protection was to run along side that. Because, as I say, if you pay of your mortgage, if you heaven forbid, you had a critical illness or diagnosed with a critical illness and that paid off, you’ve still got to replace that income. That’s done its job with no mortgage, the bills will still keep coming in: you will still have your food bill; still have the on-going utility bills to pay for, you’ll still need to run the car. None of that goes away so what can happen without the income protection is that you don’t actually use all that money to pay of your mortgage off with the critical illness. You tend to pay maybe part of it off and then use some, which will eventually run out in time, to actually keep you going on a monthly basis. Whereas a policy with LV= took me to age 65 so, well even I’m you know it takes me to retirement well the mortgage will be gone by then.

The impact of not having any cash is an horrendous thing because it actually stops you getting better as well because you start to worry about money, how much things are going to cost; the impact it has on your family and your children - so it’s an incredibly important policy and something that I think would be, almost an injustice really, not to actually talk to our clients about this policy and make them aware, really make them aware, of how serious this can be. It certainly changed my thinking.

Business Protection: Key Person Cover


Business as usual can suddenly become very difficult if one of your key employees, someone the business heavily relies on, dies or suffers a serious illness.

How long could your business survive without them?

Different types of businesses will have different key people.

They could be your best performing sales person, a software engineer, one of the business owners.

And the risks associated with losing a key person can include:

  • production being stopped
  • sales targets being missed
  • the loss of important business contracts
  • the business might have to pay large penalties if goods or services aren't delivered
  • and your bank might lose confidence business loans can be repaid and demand the debt is cleared

Key Person cover is a type of insurance that can protect the survival of your business.

It pays out a lump sum if your key employee dies or is diagnosed with a critical illness.

You can use the money to:

  • make up any loss in profits and keep the business running whilst you're looking for a replacement
  • help cover recruitment costs
  • or clear business debt that would have to be repaid due to the loss of the key person

Key Person cover can give your business the breathing space needed during a period of instability and uncertainty.

To find out more, please speak to your financial adviser.

Business Protection: Share & Partnership Protection


What would happen to your business if one of the owners suddenly died or suffered a serious illness?

Could you afford to buy their share?

If not, the affected owners family might sell their shares to a competitor or someone else completely unsuitable.

This can be disastrous for the long term survival of the business you've worked hard to build.

Business owners are usually the life-blood of the firm, with staff relying on their experience and knowledge.

Their sudden loss can heavily impact morale, leaving staff worried about the future of the business and their jobs.

Shareholder and Partnership Protection is a type of insurance that gives surviving business owners the money needed to buy the affected shares.

It can help ensure you keep control of the business and give staff confidence that their jobs are safe.

The money also ensures that the deceased owner's family are looked after and receive full market value in exchange for their inherited share of the business.

You probably already protect many of the important things that keep the business running smoothly, like property, fleets and stock.

So it makes sense to insure your most valuable assets, your business owners.

For help with setting up Share or Partnership Protection, please speak to your financial adviser.

LV= Income Protection

Hi, I’m Daniel from LV=

Let me tell you about some fantastic enhancements to our Income Protection product that we think will make it easier to recommend Income Protection to your clients.

With extended coverage, new benefits, and wider eligibility than ever before, LV=’s Income Protection is here to help you reach more clients.

That’s why we’ve extended our coverage with new wider eligibility.

We now include an additional benefit, where we will make a lump sum payment to your client if their child gets diagnosed with a listed illness.

We’ve improved our NHS sick pay guarantee to extend the benefits to dentists as well as already covering doctors and surgeons.

Your client no longer needs to be directly employed by the NHS to be eligible, as long as they’re covered by the NHS sick pay arrangements or those that mirror this.

We’ve had lots of feedback over the years and as a result of this we’ve made it much easier as we’ll now take into account the last 12 month’s income when working out the maximum benefit we can pay clients.

Our rehab support services will now be available during the waiting period, helping clients realise the true value of their income protection policy. Helping your client recover and get back to normal as quickly as possible.

We’ve increased our cover limit to £250,000. This is really great as we have a lot of advisers that have high net worth clients meaning they can take out a much larger sum assured.

We’re extending our Income Protection offering and adding more benefits to make it easier for you when you are recommending income protection to your clients.

If you would like to find out more about these great changes, please head to the LV= adviser site.

LV= Flexible Guaranteed Funds - Smoothing Explained

Take a look at our new video that explains how smoothing works on the Flexible Guarantee Funds.


LV= Flexible Guarantee Funds – How does smoothing work?

Looking to reduce the impact of market volatility on client investments?

LV=’s Flexible Guarantee Funds have a built in smoothing mechanism that’s uniquely designed to reduce the impact of daily market volatility.

So, how does it work?

Our smoothing process uses a daily average of fund prices from the past 26 weeks to reduce daily market fluctuations. So, it’s based on what’s happened in the past, rather than market speculation. It’s simple, transparent and easy for your clients to understand.

During the first 26 weeks of investment, clients’ funds are valued at the underlying price. After week 26, the smoothing mechanism kicks-in.

If markets are growing then you can expect to see smoothed prices increasing at a slower rate than the underlying prices. But if the markets are falling or fluctuating, the smoothing mechanism will help to protect investments against sudden volatility.*

This extra protection is valuable for lots of client types, such as cautious investors and retired investors.

Clients can also add a capital guarantee for extra security. This can be added at any time, not just at the outset.

Find out more at Alternatively, speak to your Retirement Consultant or call us on 08000 850 250.

*In exceptional market conditions (when the underlying price is 80% or less of the averaged price) the funds will be valued on the underlying price. LV= also reserve the right to do this at other times.

Webinar: Investing for Retirement after March 29

Good morning and welcome to LV=’s webinar ‘Deal or no deal: investing for retirement after March 29th.

I’m Andrew Gilbert, Head of Product and Proposition, and I’m delighted to be joined by Alex Lyle of Columbia Threadneedle Investments and Warren Bright of LV=.

Today, we’re going to build on our previous webinars where we’ve looked at the impact of investment volatility on pension funds, sequential risk, pound cost ravaging, volatility drag, and withdrawals. If you missed these, please do speak to your usual sales contact to grab a copy.

Today, we’ll look at whether now is the right time to be in, or indeed enter, a smoothed fund in spite of market uncertainty and Brexit. Between three panellists, we’ll talk you through different investment options, get the latest market views from Columbia Threadneedle Investments, we’ll look at the smoothed investment features of the LV= Flexible Guarantee Funds, and using the funds as part of retirement income planning.

So, I asked my marketing colleagues to find me a picture of my favourite Donald. I wanted Donald Duck, I expected them to find Donald Trump, but instead they’ve showed me Donald Rumsfeld. So, what can I tell you about him? Well, back in 2002 he took a press conference when he was Secretary of State and in that he coined the phrase ‘known unknowns’. This is where you know something is going to happen but you’re not sure exactly what. And there are three variants here, known knowns, unknown knowns, and unknown unknowns. He was focussed particularly in the known unknowns in the context of the war at that point. Now that’s a particularly pertinent challenge, these known unknowns, in investment markets and the markets tend not to react very well to them.

So what sort of known unknowns are we facing? Well, Brexit for sure. Something is going to happen, but if you know exactly what it is then you’re probably kidding yourself. We could see trade deals, but on who knows what terms. They could be WTO, will they be something else? We do not know. We could see UK GDP fall. Maybe in the medium term it may even rise. We could see manufacturing and other businesses turn their backs on UK markets. We’ve heard in the press about food shortages, about shortages in medicine, about an economic collapse. Equally, it may all be fine.

There’s also wider global uncertainty. In the US, with Trump’s nationalist agenda and his obsession with constructing walls between nations. Trade wars and economic cycles in China, and lots of political uncertainty in various locations across the globe. So, there’s no escaping the fact there’s lot of volatility about.

But, your clients still need to make decisions for the long term, and you can help them do that. Now, the longer they have the better. It’s ‘time in the market’, not ‘timing the market’ that’s most important. But volatility can really harm your retirement wealth, especially when you’re taking an income from the plan. So, why now?

Let’s take a ruler or a big tape measure. The kind that you can see in blue flat pack furniture stores that you might visit at the weekend. So pick up one of those and let’s imagine that your client is expecting to live to 100. So, 1cm on that ruler represents one year in their life. Tear off their current age. That time is gone, there’s nothing they can do about that. Now think about when they plan to retire, tear off there. So, in our example, they’ve got 14 years before their planned retirement date. That’s the time they’ve got to invest and make that work for them. And, that time needs to provide for them for the next 38 years (if you believe the 100 year life is plausible). In our

example, they’ve got 14 years to fund 38 years of retirement. So, the time to wait is over. Can they afford to delay? Can they wait to take action for another year, two years, or even five years?

So let’s consider some options. They could go into cash. It’s fairly safe, but there are minimal options for growth. As a tactical option, it’s fine. But, we’ve seen increased regulatory challenge for this investment type in CP 195 recently and it certainly won’t keep pace with inflation if the past is anything to go by.

Then we’ve got passive investments. They’re likely to offer a lower charge, but clients may end up throwing good money after bad to maintain the required asset allocations in a volatile market.

So, let’s move on to actives. They allow the fund managers to select income or growth stocks depending on their views of the investment cycle, of company fundamentals, market intelligence. They may do well in more volatile markets.

Finally, there are active managed smoothed funds. These overlay the benefits of active management with a mechanism to smooth the bumps in the road along the way.

Now you may expect to hear me say this, but smoothing is a great mechanism. LV=’s smoothing is unique. After six months you get a price that averages out the previous six months. We do it this way because it’s fair, it’s easy to understand and to explain, and you don’t get returns from a time when you weren’t invested. That’s why we don’t give it to people from day one. Because they’d be getting an investment return from before they were invested, and that doesn’t seem very fair to us.

So, why are smoothed funds not more common? Well, providers see the benefits for customers, but they need to assume the costs and the risks of providing that smoothing, and that needs a strong balance sheet that I’m pleased to see we have at LV=.

So, to summarise, Brexit is scary, but the need to find solutions for clients doesn’t go away in scary markets. In these volatile markets, the benefits of active management may well dominate. But, the opportunity for the active fund with smoothing may be even greater.

So, I’d now like to hand over to Alex from Columbia Threadneedle Investments to give us the view from our fund managers.

Alex Lyle

Hi, morning.

So as you’ve heard, I manage the Flexible Guarantee Funds and I am going to look back over a very difficult Q4; and then talk about what’s happened since; at how we currently see the world, and therefore, how the funds are currently positioned.

That is how we went into Q4. We basically saw a continuation of global growth and of equity bull markets. We certainly recognised that we were in later stages of these two, but we thought that the outlook remained favourable, and hence our position for it. So, we were overweight equities, we were underweight bonds. Japan was our most favoured region in terms of equities. The style of our stocks was definitely favouring growth companies. Companies that we really believed in, companies that we expected to see reasonable growth from over the medium term. Within bonds, we favoured credit, in other words corporate bonds, over government bonds. So, that’s how we went into the quarter. And on the next page you can see what happened. We had a correction.

That chart shows six corrections of 10% of more in this long bull market. But, the point of showing you is that corrections are normal in bull markets. They’re painful when they come along. As an equity investor you have to accept that you’re going to suffer them, but if you sit through them, you come out the other side and things look a lot rosier. It’s very hard to know what’s going to trigger them. It’s usually completely different factors.

There’s plenty of uncertainty around at the moment that might trigger a correction. But, the danger is if you position yourself for a correction coming along and it doesn’t come along, then you’re out of the market and looking foolish. It’s better if you think we’re still in the bull market, sticking with it.

So we went into the fourth quarter still optimistic and were hit by this correction. So, what happened in that correction? It really was the perfect storm. If you look at equities, equities globally were down over 11%. Japan, one of our most favoured regions, was one of the weakest markets. And that got hit in the risky environment. People chased the yen and strong yen wasn’t good for equities, Japan being a major exporting nation. Within equities, we saw value type stocks, lower quality type stocks performing better than decent goods stocks. Basically, they held up better because in a correction, you tend to find people panicking to raise funds by selling things in which they’ve got profit. Value stocks just didn’t have that sort of profit in them. If you look at the right-hand graph (slide 17) it shows growth type stocks against value type stocks, and you can see value holding up much better, so that didn’t suit our portfolios. Finally, under equities on the left-side, I put bond proxies performed well. By bond proxies, we mean stocks that are a bit like bonds. I.e. they have a large yield, but not much else going for them. Things like utilities, staples, etc., which we don’t find very exciting investments. We think you get much better opportunities elsewhere, but those sorts of things held up well and government bonds performed.

On the right-hand side, I’ve mentioned that bonds obviously did well. The JPM global government bond index was up 4%+ and corporate bonds outperformed government bonds. If you look at the bar chart in the bottom left at the two bars on the right, you can see government bonds did very well. Credit, on the other hand, was flat.

The final point, is around the property investments in the fund. Property is an illiquid asset class and the pricing policy of property funds is such that when they go into net redemption, the price gets swung down, and when they go into normal sales, the price swings back up again. That’s to protect policy holders. It’s a sound policy, but it did mean that in early Q4, when there was the risk of people again taking profits in investment, people sold property and the price of the fund we’re investing in swung down. That means it lost about 6.5% of its value. Just on a pricing basis, the portfolio is still in good shape. It’s still all there. The sales have pretty much all dried up now. We’re seeing buyers start to return. So, at some stage, the price will swing back up again and then the fund will benefit. But in the meantime, that has been lost on the valuation basis.

So, that was a very painful Q4. What did we do? Certainly, when you get a nasty correction like that, you worry about the environment and whether you’ve hit the end of the growth cycle. We kicked the tyres a lot, but we basically stuck to our beliefs. We still think the environment is a reasonably benign one. As a result, we took the opportunity to top up some equity regions. Particularly Asia and the UK, where we’ve been quite cautious relative to other areas. But, we do think that the underperformance of the UK may be over for the time being, and that it might be due a bit of a catch-up. We think that one way or another we will probably get a softish or delayed Brexit, so there could be a bit of a relief rally on that. So, we topped up some equities on weak notes; we top-sliced some of our bond holdings on strength; and within the underlying funds that we invest in, our fund managers topped up some of their favourite companies at the lower levels. Basically, we stuck to our guns.

So how do we see the world now? Equities remain our preferred asset class. On the left-hand side (slide 19) we’ve listed some of the positives we see. We think that global GDP growth, economic growth, remains reasonable. It’s certainly not desperately strong and it’s a bit lower than we had anticipated a few months back, but it’s still reasonable growth in nearly all regions globally. Very importantly, corporate earnings growth, which is fundamentally what you’re buying when you buy shares or when you buy equities, remains fairly healthy. Valuations after Brexit, we think appear reasonably attractive. On a final point, we think the central banks appear to be taking a more dovish position. Central banks are talking much more benignly, more dovishly, when it comes to interest rate rises. We are expecting very few interest rate rises around the globe now. The US was the place leading the way on that, but we don’t expect any US rate rises this year now. We’re not expecting anything in Europe. We’re not expecting anything in Japan. We have got one rate rise pencilled in for the UK later in the year, but that’s very much based on some increased certainty over Brexit and a reasonable settlement over Brexit. So, that could easily be kicked into touch as well.

Lots of risks on the right-hand side (slide 19), but we think they can be overcome. We think for Brexit we’ll get some sort of reasonable resolution, and we do expect China and Trump to come to some sort of satisfactory resolution of their trade war. So, on balance, we remain optimistic on the outlook for equities.

On some of those points, you can see our economic forecast for growth on the left-hand side (slide 20). Not, as I said, phenomenal growth, but steady, gentle growth nonetheless. Corporate earnings, on the right-hand side, that is the level of earnings growth we expect from a number of major regions this year and next. On a weighted basis that comes out at about 8% earnings growth this year, and 7% next year. In a world of inflation down at about 2%, that’s pretty good real earnings growth. If the PE stays the same, that earnings growth comes through to capital appreciation of the market and you’ve got the yield on top of that, which to us looks reasonable value.

On the subject of valuations, on the next page (slide 20) on the left-hand side, you’ve got the PE ratios for major regions shown by the blue bars and above that you’ve got the darker dots and those are the average PE for each market since 2000. So, you can see in all regions now that equities are more lowly valued on a PE basis than the average. On a yield basis on the right-hand side there, you’ve got the yield on equities, the ACWI index as it’s called (the All Countries World Index) at the top now, well above the yield above global government bonds. We’re seeing decent dividend growth as well. On an income basis, equities appear much better value to us than bonds.

Moving on to bonds, on the next slide (slide 21) you can see the yield on 10-year government bonds in a number of regions. We don’t think the environment for bonds is at all bad. We think inflation will remained subdued, down at the central bank target at around 2%. As we’ve said, we’re expecting very little in the way of interest rate rises. So, it’s not a bad world for government bonds, but we struggle to see much value from current yields. You can see from the chart that the yields have come down and down and down over the last 20 years. They have risen a bit in the last 2 years, but we still think there’s not much value in government bonds. There’s more value to be had from equities. Having said that, we’re not expecting yields to shoot up from here given that it’s a reasonably benign environment for bonds, but we just expect lowish returns.

We still think within bonds that credit is better value than government bonds. This chart shows you the spread, which is the incremental yield you get from taking the extra risk from going to corporate bonds rather than government bonds. The higher that spread, the greater the incremental yield you’re picking up. You can see that’s risen quite a bit over last year, though it has come back this year. But generally speaking, it’s risen quite a bit and it’s representing pretty reasonable value. That extra yield you’re getting and we think that can narrow a bit to give you a bit of extra capital appreciation above what you get on government bonds.

Finally, a look at property. Again property we think is still fairly attractive. There hasn’t been much building in this cycle. There’s been very little funding available for new developments. Banks haven’t had the cash to spare for property development. They’ve needed to repair their balance sheets. As a result, supply and demand, A from tenants and B, generally from overseas buyers, has been good. So, good supply and demand fundamentals remain. There are clearly risks from Brexit. If we have a bad Brexit then that could potentially frighten off overseas investors, and the other threat obviously is the high street. We’re seeing an increasing number of CVAs (Company Voluntary Arrangements) where high street retailers are handing back the contract on their properties, which is a negative, without doubt. But, we don’t think our portfolios are too badly exposed to the riskier candidates on that front.

Within retail, we have got some good quality tenants in high streets, but more importantly, we’ve focussed on the warehouse type properties, the distribution type retail properties, which is what the online retailers are using for distribution and storage. The likes of Amazon, for example. Those sorts of distribution hubs are highly valuable and have shot up in value, so they’re hard to get hold of now.

There’s definitely one negative there, but there’s a positive on the other side.

The yield on property remains pretty healthy, just a bit short of 5% on the index, and our portfolio has a higher yield than that, which we think makes it pretty attractive. Having said that, we’re well into this property cycle; it’s been a long bull-market; it’s a fairly illiquid asset class, so you do need to be lightening the portfolios early on, and we have taken some profits in our property positions.

So to summarise how we see things with the final slide (slide 25), you can see that we use an asset allocation matrix at Columbia Threadneedle. You can see we favour equities, we favour property, and we favour credit, i.e. corporate bonds. We’re cautious on government bonds. Within equities the regions we particularly like are Europe, Asia, and Japan. But, we also find a lot of attractions in the US, the UK, and the EM (Emerging Markets). There’s nothing we feel very negative about. That’s how we see things. Clearly Q4 was very difficult. Since then, things have looked a lot rosier. The first two months of 2019, things have got off to a good start and in nominal terms the funds have clawed back between half and two thirds of what they lost in Q3. So, confidence has been restored to markets, and as well as markets going up, the sort of stocks we hold have done well in Q1. The markets are looking towards better quality stocks that can do well in today’s world. Hopefully, this trend will continue and we can make good the rest of the loss we had in Q4.

Andrew Gilbert

Thanks, Alex. I’d now like to hand over to Warren Bright, Regional Sales Manager for LV=, to talk us through the FGF funds and volatility.

Warren Bright

Thank you Alex and Andrew. Good morning, everybody on the call.

So far we’ve considered the impact of investment volatility and the various risks associated with it. I’m now going to go through the LV= Flexible Guarantee Funds and look at the features of the funds that make them very suitable for clients approaching retirement, and those taking income. So in summary, the four key areas I’d like to highlight are:

1. There are three Flexible Guarantee Funds managed for us by Columbia Threadneedle Investments. Cautious, Balanced, and Managed Growth

2. These funds are risk rated by leading market analysts so you can be confident that the funds you choose are appropriate for your clients from a risk perspective

3. The funds have two unique features that make them ideal for clients who are concerned about the impact of investment volatility on their retirement income planning. The first of these, which I’ll cover in more detail, is a built-in smoothing mechanism

4. The second is an optional guarantee that can be added, renewed, and cancelled at any time.

So let’s start off with the built-in smoothing mechanism.

We feel this is one of the most important features and it’s imperative that clients understand it. It’s totally transparent. In a single sentence, our smoothing mechanism works as follows: after an initial 26 week period, the fund price is based on the average of the previous 26 weeks. That’s it.

So if, for example, the fund price is £3 for the first 13 weeks, and £1 for the second 13 weeks, then the smoothed price at week 26 will be £2. It is that simple. It’s based on reality and unlike some of our competitors, not based on what someone thinks will happen, or what they predict will happen in the future. It’s clear, transparent, and based on what’s already happened in the past.

So let’s bring this to life a bit more. The chart above shows UK markets in 2018 compared with our FG balanced fund. If you look at the red line, you can see how the smoothing mechanism helps protect against market volatility over the whole year. The mechanism on the Flexible Guarantee Funds produces a much smoother line, ironing out the sudden market fluctuations (both up and down). So, for clients thinking about taking an income, it takes out a lot of uncertainty and gives them a certain level of security during the retirement income process.

So, here I’ll go into a bit more detail about how the first 26 weeks operate, where your client moves on to the smoothed price. The chart on the left demonstrates that over 26 weeks in a rising market, the smoothed price can take slightly longer to catch up to the underlying price. The chart to the right shows a falling market where after 26 weeks, if the underlying price is below the smoothed price, then there’ll be an increase in the value of the fund as the smoothing mechanism starts to take effect.

The second key feature of the funds is the guarantee option. This protects against volatility and I describe it as a ’sleep well at night’ feature, which is purely optional. Just to be clear about what it actually gives you and your clients, it provides clients with the full value of the fund at the point that the guarantee is added. If at the end of the guarantee term, your client wanted their money, LV= would pay the greater of the value of the fund, or the initial guaranteed amount (less any withdrawals or charges). Guarantee terms range from 8 to 10 years depending on the fund you choose. What I like about the guarantee is the flexibility that it provides for you and your clients. You can start, stop, and renew the guarantee whenever you want, not just at outset. It’s completely flexible and provides plenty of advice opportunities.

As I highlighted earlier, a really important point I would like to flag is that all three funds are independently risk rated by three leading market analysts: Defaqto, Dynamic Planner, and Synaptic. This means you can be confident that a client is invested appropriately according to their risk profiles. As you can see they typically range between 3 and 5.

Despite recent market volatility that Alex described, our risk ratings have remained the same for all of our funds, where some of our competitors’ have increased. Defaqto also produce an in depth Due Diligence Report on our funds and it’s definitely worth a read. If you require further details on that, please get in touch with your Retirement Consultant, who will be happy to help you.

On to charges, a really important point. Our charging structure isn’t tiered. You pay the annual management charge depending on the level you invest. So, for a client with a £250,000 in a pension pot, you’d be paying an AMC of 0.875. A recent change for LV= is that we’ve reduced our wrapper charge for funds that are purely invested in our Flexible Guarantee Funds to 15bps. Therefore, a client with £250,000 is looking at an all-in cost of 1.0% for a fully multi-active fund with a clear, transparent, smoothing mechanism.

However, if you did want to use our Flexible Guarantee Funds as part of a blended solution, then you can do that through LV= as well. For a wrapper charge of just 25bps, we can provide you with a pension wrapper that can include the Flexible Guarantee Investments, but could also include one of a number of our 200+ insured ranges. We could even include a discretionary fund manager if you wish along with a Flexible Guarantee solution as part of our SIPP wrapper.

Finally, for being a member of LV=, we will offer full member benefits. Importantly, we offer a guaranteed loyalty discount which reduces the amount of AMC depending on the length of time a client holds the investment for.

So, how do we think this works with client solutions? Where do we think you could really benefit from using our Flexible Guarantee Funds?

One way could be consolidation of assets from a number of pension pots.

Another could be for clients within 10 years of retirement, where you’re looking to de-risk your client’s portfolio.

A third, for those already in retirement who want to de-risk their income portfolio and reduce sequential risk.

And finally, those looking to blend various investment options rather than looking to put all their eggs in one basket.

I’ll now summarise the points that I’ve covered. We’ve looked at the impact of investment volatility and how it’s a real cause for concern for advisers and clients. We’ve gone through the features of our Flexible Guarantee Funds and how the built in smoothing mechanism and optional guarantee can help provide shelter for clients against investment volatility. There’s a choice of three funds, all of which have been independently risk rated by independent fund analysts. The funds are managed by Columbia Threadneedle Investments but with an investment mandate from LV=. They can work on a standalone basis, but their unique features and flexibility means they can work alongside other investments and as part of a client’s retirement income planning process.

Finally, I would like to also point out that if these funds are appealing to you, and you do use them within a pension, then we also offer them as part of our investment bond.

Thank you for listening. That brings me to a close, and I’m now going to hand back to Andrew.

Andrew Gilbert

Thank you, Warren.

So, we’ve heard a little bit around the volatility in the current market positions. We’ve heard some views form Alex and Columbia Threadneedle Investments around how they see some of the current challenges in the market. It was certainly reassuring to hear their views around equities and how they sit relative to bonds and property, and Alex’s insights on the global market challenges. We’ve also heard from Warren. I think the key message for me was that the performance does take time to come through. It gets there, but it’s averaged out. That provides certainty and a smoother journey. So, where we see a negative performance followed by a positive one, these will balance out until the negative falls away. As Warren said, if you’d like to see more information on this, please do speak to your Retirement Consultant.

So, let’s move on to some questions that we’ve had today. The first one is for Alex.

Question for Alex. How would a delayed Brexit likely impact on financial markets?

Answer: I think a delayed Brexit would initially give a bit of relief. Clearly, the worst case for markets is crashing out, and a delay would lift that risk. So I think there would be a relief for UK assets in general. But, the trouble with it is that uncertainty continues and you don’t know what the final outcome would be. In the world of uncertainty, investment decisions will be deferred. Hiring decisions will be put on hold as well. Consumers, likewise, won’t be making big ticket item decisions and will put them on hold. So, initial relief, but then uncertainty carries on. Decision making is deferred, which doesn’t help growth. If it was deferred, a fairly short period of deferral would be welcome. If it was a reasonably long term period of uncertainty, then slowly it would be negative news for markets.

Question for Alex. And if there was a general election and we saw a change of government? Would that lead to more volatility in markets?

Answer: That would compound the problem, and not be good because the risk of a Labour government would worry markets. It doesn’t sort out the Brexit issue either. So, by the time you’ve got a new government that means no decision making for longer. So, that would be the worst of all worlds and more ‘known unknowns’.

Question for Warren. Can you use the Flexible Guarantee Funds alongside other retirement options like fixed term annuities?

Answer: As I explained earlier, the LV= pension wrapper can include other investment elements so you can avoid putting all your eggs in one basket. Within LV=, we offer a Protected Retirement Plan, which is essentially a fixed term annuity, and you can look to include this as an option within a pension wrapper. You can therefore make sure you provide your client with a guaranteed level of income. You may wish to cover a client’s minimum expenditure and get income from this element of the wrapper, while still creating investment growth from the Flexible Guarantee Funds, all in one place.

Question for Warren. So, if I had a client who wanted a level of guaranteed income in their plan and then wanted to take a little more risk using the smoothed funds, they could have both of them sit side by side within that wrapper?

Answer: Yes absolutely. Remember, you’re not restricted to the Flexible Guarantee Funds. You can include other passive or active funds as part of that portfolio. We believe this gives clients and advisers a number of options.

Question for Alex. If we expect low returns from government bonds, how do you try and increase these returns as investment managers?

Answer: There are two things we do in the portfolios. One is [indecipherable], we overweight those asset classes and underweight bonds. Within bonds we do have a bias towards credit, which we do think is more attractive than government bonds, and can show reasonably good steady return. We’re not expecting government bonds to fall in value particularly. Although we’re expecting low returns, that doesn’t mean they haven’t got a place in portfolios. The whole point of being in a managed fund means you should have a wide spread of assets. Hopefully these are negatively correlated or uncorrelated, so when we go through more turbulent patches then we have the bonds in there for steadier value. So, we feel perfectly comfortable holding the level of bonds we have.

Question for Warren. How does LV=’s smoothing compare to others like Aviva’s and Prudential’s?

Answer: Just to make sure we’re clear about how LV=’s smoothing operates, ours is a mechanism which is based on actuals. We class it as ‘rear mirror’ because you can look back and see what’s been delivered. We also have a guarantee option can be added, renewed, and cancelled at any time. Aviva’s and Pru’s are forward looking smoothing mechanisms. They think about what’s going to happen in the future and they have a projected growth rate. However, we say they’re both good solutions and we recommend them as part of diverse portfolios. In addition to that, I would also mention that as part of our SIPP we can include the Pru funds as part of an investment solution and you can have them alongside the Flexible Guarantee Funds as well.

Question to Warren. And does that work in reverse? Can you hold Flexible Guarantee Funds if you’ve got an investment at the Pru?

Answer: No. They’re exclusive to LV=, so you need to come to the LV= pension wrapper. Andrew Gilbert

The aim of today’s webinar was to look at the potential impact of investment volatility on pension funds and to consider different investment options that can help mitigate risk and meet the different needs of clients in retirement. We’ve looked at those different options; we’ve looked at the market view from Alex at Columbia Threadneedle Investments; we’ve looked at the smooth investment features of the LV= Flexible Guarantee Funds, and how those funds can feature as a part of retirement income planning.

So, we’ll follow up on any other questions that we get through. I’d like to thank Alex and Warren for their time this morning and for sharing theirs views with us.

Thank you very much indeed, and have a great day.

LV= Flexible Guarantee Funds Bridge

Give your clients a smooth bridge into retirement with our signature hybrid which has the potential for growth (with optional guarantees) for a fixed period.

The LV= Flexible Guarantee Funds Bridge is a packaged hybrid solution for you and your clients to consider.

Before reaching retirement, most of your clients will feel in a position of relative stability, in employment receiving a regular income and by age 75 the chances are they’ll have a clear sense of what they want the rest of the retirement to be like and the money they’ll need to support this.

But a lot can happen during the early years of retirement and your clients need both flexibility and security during this time. The LV Flexible Guarantee Funds Bridge can give your clients a perfect bridge over this period of uncertainty. It’s been designed for those at the start of their retirement who want both flexibility and the potential for growth.

It works by investing your client’s pension pot in a SIPP wrapper provided by the LV= Flexible Transitions Account, then all you have to do is allocate your pension benefits between a hybrid of two products.

The LV= Protected Retirement Plan is our version of a Fixed Term Annuity and provides the guaranteed regular income which is paid into a SIPP bank account. Your client can choose to hold the income there to help with tax planning, transfer it into their domestic bank account or reinvest it. It even provides the flexibility for ad hoc income payments to be made.

The potential for growth is provided by a choice of three Flexible Guaranteed Funds, a cautious, balanced or managed growth option all risk rated by distribution technology. All of the funds come with investment smoothing as standard and optional capital guarantees. This signature hybrid solution can be arranged with one simple illustration and one signature-less online application which offers your client one account, one income payment date and one annual statement.

Find out more about how the LV=Flexible Guaranteed Funds bridge can give your clients the perfect bridge into retirement by speaking to your usual LV contact or by visiting

The LV= Flexible Guaranteed Funds Bridge is the simple way for you and your clients to consider, select and purchase the most popular LV= blend of retirement income solutions.

The LV= Flexible Transitions Account

Flexible Transitions Account

Welcome to the Flexible Transitions Account from LV=, offering a solution to the challenges facing clients who have multiple pensions with different providers.

It provides a cost-effective alternative to existing plans with high charges, putting the client in control of their retirement and taking advantage of the wider range of options for accessing their pension introduced by Pension Freedom and Choice.

It brings multiple pension pots into one convenient, award-winning and cost-effective plan, which provides an outstanding choice of flexible and guaranteed retirement income options.

We want to make life easy for you and your clients.

You’ll have the flexibility to move between investments and benefit options within the same account, without the need for complex internal transfers and lots of paperwork.

Giving you time to do other things.

Picking the right investment option is vitally important and the Flexible Transitions Account provides your clients with the ultimate level of flexibility over how their funds are invested; keeping pace with changing needs and circumstances.

And to support you through each stage of the process, a host of services and online tools are always available.

The Flexible Transitions account provides great value with access to low cost, high value investment funds including market leading passive and risk rated solutions.

Clients have added security with options to help provide protection against market fluctuations and provide a guaranteed income in retirement.

Our Flexible Guarantee Funds offer a built in smoothing mechanism to take away the volatility of pension investments and optional guarantees to protect against unforeseen market changes.

What’s more, our fixed term annuity, the LV= Protected Retirement Plan, can be used as a trustee investment within the Flexible Transitions Account to create additional income flexibility.

The Flexible Transitions Account provides bespoke retirement investment solutions through Discretionary Fund Management and pure SIPP investment.

And to support you provide the right information to your clients, we’ve worked together with a number of key providers of back office systems and our panel of six of the leading DFM providers.

As the largest friendly society in the UK, owned by our members and not shareholders, we can channel our energy and resources into doing what’s right for our customers – including financial professionals just like you!

Being the most trusted life insurer means that in addition to providing award-winning products we also provide the right support, training, development and technical guidance when you need it most.

If you’d like to find out more you can contact us on the details shown.

Introduction to Flexible Guarantee Investments

Investing money can be stressful, especially when faced with a range of options to consider how to fund ones retirement - it's crucial to make the right choices. Thankfully LV= is here to help. We've created a set of funds called the LV= Flexible Guarantee Investments to help take some these worries away.


I’m Jon from LV=

Investing money can be stressful for your clients.

In 2014 the Chancellor introduced the revolutionary pension freedom and choice changes, which means your clients now have access to a range of options when thinking about how they can fund their retirement.

But of course it’s crucial that you can help your client make the right choices, especially when it comes to their investments.

Thankfully, LV=’s here to help.

We’ve created a set of funds called the LV= Flexible Guarantee Investments to help take some of these worries away.

We selected leading fund managers, Columbia Threadneedle to manage these funds for us so we can help provide the potential for your clients to grow their investment, whist also offering protection from market volatility.

Let’s take a closer look…


With our Flexible Guarantee Investments, you can choose one of three risk-rated, multi-asset funds that all offer a unique average price mechanism. This helps to smooth out the peaks and troughs of short-term market uncertainties.

The smoothing process is transparent and simple – Let me show you

Your client invests in the underlying price and this is used to value their investment for the first 26 weeks. After this the smoothing mechanism kicks in so it’s now valued at the averaged price from here on.

This has the benefit of absorbing and reducing the effects of short term market volatility.

The mechanism is tried and tested – it even operated normally throughout the credit crunch!


The funds have the added benefit of an optional capital guarantee which your clients can purchase at any time.

This makes it possible to guarantee a known value at a known point in the future regardless of what happens to the stock market in the meantime.

What’s more, the guarantee can be switched on or off at any time, which means your client can lock in any existing investment growth, whilst still benefitting from any potential future increases in value.


These features may make the LV- funds the perfect choice for you and your client, especially if they’re looking for investment growth but are concerned about the impact of stock market volatility.

The three funds invest in a mixture of different assets to offer a choice of risk levels – to suit different attitudes towards investment risk.

Clients can invest in the funds through the LV= Flexible Guarantee Bond, or as part of a personal pension.

Both options feature competitive charges- including a loyalty discount which acts to reduce the annual management charge after a qualifying period.

And don’t forget, with LV= your clients also have access to our range of member benefits, including discounts on home, pet and travel insurance, and 24/7 access to our member care line.

To find out more about the LV= Flexible Guarantee Investments, please contact your usual retirement consultant, call our Retirement Desk on 08000 850250 or check out

6 December 2018 Webinar - Retirement income in a volatile market

With insights from Columbia Threadneedle Investments’ Fund Manager, Alex Lyle, this webinar examines how the Flexible Guarantee Funds can help protect your clients against potential market volatility.

  1. Download the webinar slide deck

LV=, County Gates, Bournemouth, BH1 2NF, UK