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Choose an option and learn more on our proposition or guidance on a number of protection or retirement issues.

Featured video - Explaining Smoothing for clients

Looking to grow your investments but worried about the ups and downs of the market?

The LV= Smoothed Managed Fund range could be what you’re looking for.

Smoothing helps reduce the stress of investing to offer you more tranquillity. It gives your investments the potential to grow while helping protect what you’ve saved so far. We use smoothing to average out the short-term ups and downs that come with stock market investing, so your money is better protected against sudden market volatility that can often induce anxiety.

Smoothing won’t protect funds against sustained poor market conditions, but it helps give stability and more peace of mind. Here’s how it works.

After 26 weeks investment value moves to a smoothed averaged price, which is an average of daily fund prices from the past 26 weeks. When markets are growing, smoothed prices will increase at a slower rate than the underlying prices. When markets are falling or fluctuating, the smoothing mechanism will help protect your investments against sudden volatility.

This is why the LV= Smoothed Managed Fund range is ideal if you want to reduce the risk to your investment and help protect the money that you’ve accumulated so far.

Our Smoothed Managed Fund range can be accessed via our: Pension (Flexible Guarantee Funds), Bond (Flexible Guarantee Bond), And ISA (LV=ISA) products.

To find out more, speak to your financial adviser.

The Smoothed Managed Funds are stock market related investments so you aren’t certain to make a profit and may get back less than you invested.


Featured video - Helping your clients navigate their way through the long-term care journey in later life

In the Q1 edition of our equity release webinar we explored the changing needs of customers and discussed how lifetime mortgages can help fund long-term care.

Georgina Oxton (GO)

Andrew Gething (AG)

GO: Good morning everyone and thanks for taking the time to join us on our webinar today; we really do appreciate it. My name's Georgina Oxton and I head up the Equity Release Sales team here at LV=. I'm also joined today by Andrew Gething from MorganAsh.

We have partnered with MorganAsh to provide additional support to our customers in later life, and Andrew will explain more about this partnership later. Before I go through the agenda for today I just wanted to cover a little bit of housekeeping.

You will all be on mute throughout today's webinar which means we won't be able to hear you. If you have questions about what you hear today, you can submit them using the chat function and we've allowed time at the end to answer as many questions as we can.

So, back to the agenda.

I will be covering the learning objectives of the webinar today followed by a little bit of context around how care funding has become such a crucial issue for many clients in later life. I'll then hand over to Andrew from MorganAsh who will introduce you to Care Navigator, explaining how the service can provide much needed support to your clients and more about the partnership between our two businesses.

Andrew will then hand back to me and I will be covering the market context and changing customer needs, together with a short overview of our lifetime mortgage proposition and the added value benefits we can offer your clients. We'll then draw everything together in a summary and have some time for questions at the end.

Okay, so displayed on the screen now are the learning objectives of today's webinar.

Firstly, to allow you to consider the changing client needs and how equity release could support their later life journey. Also to learn more about LV=’s partnership with MorganAsh. For you to learn more about how Care Navigator can benefit your clients who need help navigating their way through the care system and finally to demonstrate how we at LV= can add value to your equity release clients. And the last thing for me on this, obviously we've set learning objectives for this WebEx. We will be sending you all CPD certificates within the next two weeks.

I'm sure you will have spoken to many clients and their families who are concerned about the rising cost of care. According to an article in The Telegraph published in May 2018 a year in a care home can easily cost more than £50,000. There are a number of factors which can negatively impact an individual's ability to fund care and have a financially secure retirement - pension income may be less than hoped for; people are living longer than ever. Many older clients may be providing support for both their children and their parents.

The so-called sandwich generation and many older clients may be asset rich, yet cash poor. For many of these people their home may well be their biggest asset.

So you can see from this slide that social and financial trends mean that older age groups have now become the biggest owners of property in the UK. This changing distribution of property wealth has been partly fuelled by the UK's ageing population. Another related factor has been the growing concentration of home ownership amongst older households. According to the ONS the number of over 65s has increased by 2.1million since 2008, half of the total 4.2 million rise in the entire population.

Nearly two in five UK adults are now aged 55+ compared to a third in 2000. And according to the Silver Spenders Report published by Legal & General in February 2018, the potential to release this asset can benefit individuals by helping them to be self-sufficient in later life and also support the wider economy. With every one pound of equity released, it's estimated to add two pounds and 34 pence to gross UK output.

And in June 2019 the Equity Release Council published a report on the changing role of property in later life financial plans and they found that 72% of the over 45 homeowners want to live in their current property for as long as they can with the home for life mentality more visible in later life. And homeowners aged 45+ are more likely to see property as financially important rather than emotionally important.

So as you can see housing wealth has a critical part to play in providing financial security in later life.

So I'm now going to hand over to Andrew from MorganAsh.

AG: Thank you Georgina and morning all, thanks for joining us. So it's great to be working with LV= and it's incredibly timely that we have this Care Navigator launch with you guys today. I want to take you through what is Care Navigator and the challenge for care. So the first thing is you know this is prior to any virus issues. We all know that people are living longer.

Care needs are increasing. And then also families a lot of families are living remotely. So it's not unusual to have a mum living up in Yorkshire and kids living down in London. And that puts great strain on when families need to find care.

There are care facilities also provided by the NHS and social services. But navigating a way through that and understanding it is difficult, especially when mum or dad may be in a difficult situation. It's distressing on a personal level too. And you know, understandably, you only do it once or maybe twice. So the whole problem of finding care can suddenly be dropped on a family at a distressing time. And that can be hugely distressing for everyone.

For anyone who's done it you know they all come out to say "yes, it's a nightmare". There's a gap between social services and the NHS and trying to bridge that and understand it, can be very difficult. Especially at the present time; people are self-isolating and they're going to be even more worried I think. Also, if we were talking to sort of 50 and 60 year olds and they have elderly parents, looking after mum and dad it is a really high priority in our sort of Maslow's Hierarchy of Needs.

Our parents are typically the most important thing to us and we look after them more necessarily ourselves. So, obviously with the present problem with the virus (Coronavirus) that's going to put extra stress on families. We don't want necessarily people going and visiting care homes, care homes are under a lot of stress and being prepared is a big part of the service.

So let's look at what Care Navigator is.

So Care Navigator is a concierge type service. It's about first of all understanding the needs and then helping people find suitable care and that care can be in a care home or it can be at home so-called domiciliary care. It's an unbiased assessment and a bit like in finance where we do the fact find first and then we do the recommendation, and data fact find is a sort of the boring part, but is actually the most important – it’s absolutely the same here.

We need to understand the needs of the individual and what their likely outcomes are going to be. So the first thing we do is what we call the care assessment report which we assess their needs and it’s all done over the phone. All assessments are done by qualified nurses. We do that and then the second stage is then to go out and make a recommendation. Some of that can involve a bit of what we call tough love and that may be to the family, maybe to all or the person that needs care as well.

And this can be some quite difficult conversations. As part of that will also help navigate all the way through NHS and social services which is all the red tape and the confusion, and it's totally independent. So we don't take commission for many care homes of anything of that nature. Our focus is purely on the people on who are needing care. We also give quite a lot of support to the whole family during that time because that can be very distressing for them and indeed we'll talk through that in one of the case studies. It's a phone based service primarily.

We do sometimes send people out but primarily it is phone based.

At the moment most people don't know that these sort of service exist, so they just stumble into either going to Age UK or something like that and getting some information, but they don't know that they can get help. So from that point of view it's great to have that into the wider market. I should say it's not an emergency service.

So if there aren't emergencies particularly in the present virus situation then hospitals and NHS would be the better place to go.

So how does that support advisors?

In our view looking after mum and dad and looking after the emotional side is often the most important aspect and care and worrying about that is of high concern and a lot of cases money is secondary to pay for that care or it's secondary to pay for the house which will then enable each of you to look after yourselves. Care itself is frightening and most people don't know much about it. And indeed there are a lot of variable situations in the care world.

Also many care solutions that are care committees are trying to fill beds so they have financial advice to go with that. So you may find that there's other people involved. So, if you advisors can provide part of that care solution. Care Navigator we’re all medical, although we serve the financial sector we serve financial advisers. Indeed we are FCA regulated. We actually do not do any advice and we just don't know much about money.

It's all about care and all about people. So we'll never pinch your customers from that point of view. We will very much be helping you to help your customer. And if there’s an issue about affordability we'll be coming back to you as the advisor to say, you're the person who will help on the finance side. Also with regards to equity release of course come the end of the loan, if there’s going into care then we can help at that point.

So let's look at a couple of case studies.

So the first one Mark - not his real name. He was carer for his older mum. He lived up in the North and was offered a new job actually down in London and is worried about if he moved away, how would he then look after his mum. So he immediately started searching online for care homes and then got really confused. Fortunately his manager introduced him to us and then he came on to us. We assessed his mum's health. It became pretty clear to us that she didn't have to go into care homes she could stay at home.

So we arranged for an occupational therapist to visit and do a full assessment at home. Once we've done that then came up with a recommendation on the adaptations and those were put in place. Mark's comment went from start to finish the whole journey did nothing but brilliant.

AG (reading a quote): Prior to talking to the team I was stressing and overthinking everything about my mother going to home and how she'd cope once I'd moved away. Once I spoke to a nurse, I felt like a weight had been lifted off my shoulders. I didn't realise how stressful finding the right care would be. The nurse was great and I'd highly recommend the service if you’re looking to find the care for mother or father.

Let's move on to another case study. I’m normally well up when I talk through this one because I did speak to this lady myself.

So a lot of what we're doing is helping people through that emotional time so this is a story that doesn't end necessarily well.

And the person didn't end up going to care but it does show a great amount of empathy for what it's all about.

I'll read her story.

AG (reading a quote): I received a flyer from LV= offering a support. I needed help in caring for my very sick husband John, who had been discharged from hospital at the end of February. My husband was quite poorly with multiple conditions and about to be discharged from hospital. The lady on the LV= helpline offered me the Care Navigator service. I received a phone call from Kay of MorganAsh one of the lovely nurses.

Together we discussed all our John's medical conditions, my health conditions and the impact it was having on me and explored different types of care in the home for when John returned from hospital. The doctor at the hospital advised me to look for a Nursing Home for him. I was dreading the thought of doing this. Once again Kay reassured me and told me they would do the research for me. Kay is wonderful, a gentle, kind, professional, empathetic lady. Unfortunately John's journey ended there in the hospital. In July, the day after our 45th wedding anniversary John passed away peacefully with me and my daughter by his side.

I'm so grateful to MorganAsh for their support through a very difficult time for my family, especially Kay. I felt they were there for me, by my side. Thank you both so much, your help and kindness will never be forgotten. LV= agreed to pay for John's funeral, which I was otherwise funding difficult to afford. Thank you to LV=, particularly Samantha for introducing me to MorganAsh. Your company gave me a wonderful service. I'll never forget, I didn't realise there was so much kindness in the world.

AG: That shows the whole emotional side which is the most important part we tend to talk about.

The actual service side and what we actually practically do and the next slide “service options” talks through that in a bit more detail which you'll certainly need when talking to people.

We break it down into several categories. And if you see the service option slide you'll see that. The fees on there are the full fee you get at any adviser who has worked with LV in any capacity and is entitled to a 10% discount. So let me just take you through each of those steps.

So the first part is the care need assessment. So a bit like the fact find we do for everyone and the care assessment report is the outcome of that. For some people they want to just take that if it's a relatively simple case. Now they may say well I know the care homes in my local area, I'll go and do that. So they can do that and that's perfectly fine and that works very well.

Further on from that then we'll liaise with clinician; family; we will arrange discharge arrangements and we can arrange interim care. But essentially you pay more for those that you see with the platinum service and then we do the Full Care recommendation report. So the full doing everything then is what we call the platinum service and that's the most expensive but there's the three options there. And customers can choose, they can start with just the silver and then they can progress and upgrade if they want to later on and if advisers want to bundle them with a service with something else they're doing.

We're very happy to do that. Equally you can just recommend to us and we will charge the consumer directly. So, just to talk about what are other options in the market?

So there are many existing services out there. Also, the social services you can go on to charities Age UK is probably the best one and you can get information from that. They tend to be information only if people go on the Internet they will also be led onto care homes who will also add to financial advice.

There are also some very good local services but they tend to be local and lack scalability where we cover the whole of the UK.

So we're totally independent from that point of view. There's no commission. It's a straight handoff from that point of view so liability and all of that stuff is with us. We are ISO twenty seven thousand one and it's all about human empathy with a digital view. So we are sort of fintech with empathy which allows us to do these things at scale and cost effectively while providing empathy to that. In our view it's a great way to add value to your customers. Empathy and the way we feel is probably the hardest thing and one probably generally lacking in financial advice. Also just like to add a lot of people come to us at that time of need or pretty close to it. But we also and we'd love to do a lot more where we're planning on doing things in advance so we can help elderly parents.

Another case study.

She's 90 she's driving she lives at home, she's absolutely fine, she's quite frail, she's brilliant but her kids live away from home and she's slightly concerned. So the kids are slightly worried. In that case we've got all information should something happen and it will happen sometime over the next 10 years. Then we will help her we'll be on hand to pick her up and help because we'll know we have all her preferences, have all the details on file and will be able to help with that point and so we'd like to do more of that that. But now reality is a lot of people are just reactive from that point of view and I think that's all for me.

Back to Georgina.

(GO): Thanks Andrew. I don't think I'm alone in saying how relatable those case studies were and how much value I can see that the Care Navigator service can add on a daily basis.

I think the slide you may have in front of you may say that it's Chris talking to you now.

I'm sure you've detected it's not actually Chris, it’s me but just bear with me. We're now going to go through how LV can add real value to your equity release advice process.

So what you should see in front of you now is some reason for loan data.

So this is internal LV= data that just shows what our customers are doing with the equity that they’ve released.

So a common misconception about equity release is that it's used as an option of last resort or by clients who are struggling financially. Whilst that is accurate for some, there are very many other reasons why customers might choose to release equity. Their home will be the biggest asset often that they have. So not considering that in the round with their other assets at retirement, you know could be a missed opportunity. So looking at the data here you can see 31% nearly a third of our customers are clearing mortgages or debts with equity release.

That's definitely increased year on year over the last two or three years and what we are seeing growing rapidly is gifting to family. Currently at 16%, actually that has doubled in the last three years and of course a secondary benefit of gifting to family perhaps to help them onto that the property ladder or help them out of our financial situation as there may be some inheritance tax benefits as well medical treatment and providing care.

Total 4% of our releases but we would certainly expect that to increase with an ageing population combined with you know increasing longevity and obviously that the confusion that exists around how to navigate the care system and the care options.

So we're moving on now just to talk a little bit about the LV= Lifetime Mortgage proposition.

So what you should see in front of you now is the Lump Sum product features. So the Lump Sum plan is our flagship product at present and is primarily there to release a one off lump sum to customers. Rates start at 2.75% and go up to 3.05% a year currently depending on age and LTV.

It is a conventional roll-up mortgage and additional borrowing may be available beyond that one off lump sum but that is non-contractual. Interest rate is fixed for life and our maximum loan is now £1.5 million. And interestingly for those larger loans we are not quoting higher interest rates for that business. It is our standard interest rate across all of our loans. We're currently offering a zero application fee for loans of £50,000 and above, say for loans below that the application fee would be £595.

So that offer is currently in place for up to the 30th of April with the application deadline being the 14th of May.

So other product criteria - the minimum property value currently £70,000 with no maximum property value. Minimum loan which is pretty similar across the market actually is 10,000. And our starting age for a lifetime mortgage at LV is 60 maximum age 95.

Moving on to the Flexible Lifetime Mortgage.

So it is uniquely the only lifetime mortgage in the market with a fully guaranteed drawdown reserve. And that guarantee runs 15 years from the completion of the initial loan. As you might expect there is a cost associated with that guarantee and our interest rate is currently 5.11%. Again it is a roll-up mortgage interest rate is fixed for each tranche of the loan said the initial loan will be fixed and then any subsequent drawdowns will be fixed.

Maximum loan on this plan is a £1 million rather than £1.5 million. We are refreshing our Flexible Lifetime Mortgage and we hope to be coming to market with a new and improved drawdown mortgage in the summer. But currently minimum property value like the lump sum plan a £70,000 minimum initial loan £10,000 minimum further drawdown is £2,000 per drawdown.

And again minimum and maximum ages are the same. So please do watch this space because there's exciting things to come with our drawdown mortgage.

So just wanted to highlight early repayment charges we led the way here, we were the first equity release lender to have fixed and defined early repayment charges which we believe creates transparency and certainty for your clients. The market has moved alongside us now and there are many other lifetime mortgage contracts out there with a fixed ERC structure.

Just to go through that in a little bit more detail. Year 0-5, our early repayment charge is 5% of the initial amount borrowed. And importantly that does not include accrued interest. So where you may see other lenders with arguably a similar percentage early repayment charge, do check the small print for some of those will include accrued interest and that will cost your clients more in the long run. For year 6 to 10, our early repayment charge drops to 3% of the initial amount borrowed and again doesn't include accrued interest.

So what you hopefully can see here with this early repayment charge structure is we are providing guarantees and peace of mind compared to those variable gilt linked to our sales which could be particularly powerful for customers who may need care in the future. And one last point on here. So after 10 years there is no early repayment charge at all. And importantly for joint mortgages we offer an ERC free window which runs for three years from first death or move into long term care.

So that allows customers who have been bereaved or who have lost a spouse or partner into permanent residential care just some breathing space to think about their options and not have to incur an early repayment charge should they wish to fully repay.

So what you should see now is a slide covering our 10% ERC free repayment option. Now this currently applies only on our Lump Sum+ lifetime mortgage and we've recently made some really exciting changes to this option to allow customers to have more flexible repayments so once the plan has been running for twelve months a client can choose to make up to six partial repayments totalling up to 10% of the original loan advance completely free of early repayment charges and what we've also done is in decreased the minimum partial repayment amount from a £1000 down to £250.

So we've increased the number of repayments that will allow to decrease the minimum amount so offering customers far more flexible options there.

So I just wanted to dwell a little bit on our added value benefits. So things that LV can offer your clients that no other lender can. So first of all we have LV= Doctor Services. So this gives you your customers immediate access to more than 5000 UK medical professionals all registered with the GMC. So this is accessible via an app available on smartphones. Or there is a telephone service and we're partnered with a company called Square Health.

Again that is a non-contractual service but it is completely free of charge.

So any of your clients who have taken out any of our lifetime mortgages or indeed retirement products can make use of each services available, each service available through this value added benefit. So because it's non-contractual it can be changed or removed any time. And as I say we are partnering with Square Health.

The box at the bottom there just highlights that normally private GP services can cost around £20 a month. Second Opinion services alone can average to around £700.

So customers could save around a £1000 per annum through this free benefit that we're offering.

So we will go into the component parts of the Doctors Services offering in bit more detail. There's a remote GP service which offers telephone consultations within a fixed window. There are certain service levels attached to that but that's really allowing particularly if you think about the demographic for equity release customers that maybe cannot drive anymore can actually have access to a GP remotely in their home. There's also remote physiotherapy consultations up to five free sessions per year.

There's also some mental health counselling services as well again limited to five free sessions a year private prescription services. There's also a second opinion service and also discounted health MOTs. So all of those things there is obviously a cost for the health MOT, but it is discounted if you're an LV= lifetime mortgage customer. But you know this is a non- contractual service that you're getting that you won't get anywhere else.

So just moving on to how else we can add value to your advice process.

What we hear from advisors a lot is that we're very easy to recommend because very many customers will have either had some kind of LV= product at some point during their life, perhaps it's home insurance, pet insurance, car insurance or even one of our original funeral plans. So there is a certain amount of familiarity and trust there already with the LV= brand. However there are other key areas where we can support your advice and ultimately help you deliver better customer outcomes.

So my team in Hitchin we have a dedicated and knowledgeable desk there to provide you with any kind of technical product support and also case consulting support. So I'm sure you'll all be aware you would often get one of those very strange cases on your desk where perhaps the property might not fit anybody's criteria or the particular client's circumstance may be unusual something that you haven't experienced before. What my team could do for you is to support you and liaise with our underwriters and our new business teams to see if we can find a solution for those unique cases.

And in terms of pricing I'm sure you will have experienced unprecedented numbers of rate adjustments in the market in the last year or so. We're seeing huge amounts of rate adjustments features are changing as well. And we work very closely with our Pricing and our Proposition teams to make sure that the information that we're providing you allows you really to support your customers whatever their needs. One thing we are extremely proud to say is that we are the Most Trusted Life Insurance Provider as voted by Moneywise for seven years now in a row.

If you need any more information about our proposition how we can support you supporting your clients, there is a web link on this particular slide and if you'd like more information about Care Navigator specifically, again there is a web link there. We have got a dedicated landing page which will cover some of the information and just really help you understand what this proposition is and how you could support your customers better. And obviously if you've got any new inquiries, anything that you'd like to speak about in terms of specific cases as ever you know that you can speak to my team or email my team at any time and we'll be delighted to help.

So we're now at the point where we delivered the vast majority of our WebEx content. I just wanted to summarise what we've walked through today in terms of the learning objectives that we have displayed at the start.

I introduced you to a little bit of context around the later life market and why care funding is really high on clients agendas. I talked a little bit about the changing role of property in later life financial plans and we then had a great session from Andrew talking about the partnership between LV= and MorganAsh and how Care Navigator can really help you to support clients through what can be a very difficult and distressing time.

We gave you some information around the changing context to intergenerational support, reasons for loan and customer needs and I’ve then whizzed through our current lifetime mortgage proposition. The key parts of that, I think the most important thing for me was the value added services that we talked about at the end. We're so excited to be able to partner with MorganAsh and offer this Care Navigator system. And it's really a very logical step for us to build on our journey of a value added proposition following the launch of Doctor Services.

Thank you very much for listening today. And we're now going to set up a short pause and we will go on to mute while we have a look at the questions that we’ve had submitted. So just bear with us for a couple of moments.

Okay. Thanks ever so much for your patience. And the first question that we've had is - Will this presentation be available for us to review at late today?

Answer: Yes absolutely. You will receive an email with the WebEx recording within a week from today. So you'll be able to save that presentation. You'll be able to listen to this content again at your leisure.

We have a couple of questions for Andrew regarding the Care Navigator - If a client starts on the silver package but later needs either the gold or the platinum option, do you just charge the difference? How does that work?

Answer: Yes absolutely. So it's just the difference, so it's quite common for people to start on the basis of silver and then upgrade later on.

GO: And that's a relatively simple process to do?

AG: Yes. So I think one of the two case studies demonstrated there's actually a huge variety in what we do and no two cases are the same. So the most difficult first thing actually is to predict what the cost is going to be so the actual know the silver gold and platinum packages all helped to set expectations. But in reality everyone is different. So it's a good idea. Let's say for example the first case study whether there's an occupational therapist came round and actually we know that that was done and actually it's never a problem when we speak to people when they get involved and what the fees are and we adjusted greatly from that point of view.

GO: So it sounds like it really is truly customised experience for customers.

AG: Yes. We employ all nurses and I couldn't stop them being patient focused if I tried.

GO: Okay. Fantastic. There is another question for you Andrew which is which level of care did the second case study used?

AG: So it was actually that platinum one and we did actually an awful lot of work finding because we thought the gentleman's going to go into a care home and we did locate that and find options. So he did an awful lot of work finding out that and looking at actually that work you know obviously what wasn't needed. So the answer was yes, it was the platinum from that quantity. And it's another great example of that it's not technically what we do. It's about the empathy from that point of view. So even though you know you look at it, go well it's a disastrous outcome actually from the customer's point of view they said that we really appreciated what we did.

GO: Okay great. Thanks. So we do have some other questions which I can pick up.

GO: The first one - Is LV= Doctor Services free of charge aside from the discounted health MOT, it is completely free of charge and if you go online using the web link on one of those final slide you'll be able to see far more detail about the component parts and how that all works, but yes we are bearing the cost of that aside from the discounted health MOT.

I've got another question here about would we consider age restricted properties for an example an over 60s development where they're looking for funds to pay for domiciliary care. So the answer to that currently is yes as long as the development is more than three years old. So we currently can't lend on a brand new age restricted property there are also some limits around the lease term the service charges and any kind of sinking fund again all of that information is in our lending policy which you'll find online.

So just to recap we can lend on age restricted property but only if they meet our criteria and they were built more than three years ago. And the reason for that as a bit of background is that our experience has shown us that the value of age restricted property drops significantly in the early years. Customers are often buying those at a premium with white goods. So we have had to unfortunately take the decision that we will only land on developments that are three years old or more.

I've also had a question about the 10 percent partial repayment option. It is six repayments per year?

So we were until a month ago at one repayment per year and that has now gone up to 6.

So that gives customers a huge amount of additional flexibility.

And as I said the minimum repayment has now dropped to £250.

I've got another question here about whether a client has to have an LV= plan or a mortgage to be able to access Care Navigator. So the answer to that is - no. So you can access Care Navigator via our website.

Perhaps I can hand that over to Andrew.

AG: As long as you have done some work with LV then they qualify for the 10 percent discount.

GO: Fantastic. So yes really important point. You know actually when you look at the costs that that the example costs that Andrew displayed on his slide they really struck me as extremely good value for money and if you then apply a 10% discount on to that as a result of having worked with LV= that really is providing great support at a very competitive price for customers.

I've got another question here about is further borrowing available on our products. So if I take lump sum first. Yes. Absolutely is. It is non contractual though. So the lump sum lifetime mortgage is designed primarily to provide that one off cash injection for a customer. But if their circumstances change for whatever reason they can apply for additional borrowing. Now we will at the point at which they apply assess how much they owe on their existing lifetime mortgage.

We will look at the value of their property and their current age and look to see whether there's any headroom to advance any further funds.

But it's important to say that it is non contractual. So we don't necessarily have to agree to additional borrowing. Now if I look at the flexible lifetime mortgage I mentioned the 15 year fully guaranteed reserve.

So within that 15 year period the customer can take any withdrawals within up to. That's agreed reserve once that reserve has been fully utilized. We are then in a situation just like we are one lump sum where we could consider non contractual further borrowing. But there are no guarantees that we would make that money available. Okay. So that's got us through the vast majority of the questions. So thank you very much for your active participation.

What we will do is pick up any other questions that people have submitted directly with them after the WebEx and just a quick reminder your CPD certificates will be wending their way to you within the next two weeks. So thanks ever so much for your participation today. Hope you found it useful. We look forward to speaking to you again see

Underwriting at LV=

(Chloe) I'm an underwriter in quite a big team. We assess and review the kinds of applications in order to make a decision on about how likely they would be to claim on that policy. So that might include me reviewing the application and looking at a wide range of the customer's life like their medical history, their hobbies, their sport, their occupation and their financial details.

(Jake) On a day to day basis, I may look up medical reports, I may look at issuing different medical reports and gathering whatever information I need to make an informed decision.

(Chloe) Once we review all of that information, then we might decide that we need to write to the doctor. So we'll also look at reviewing reports. We can discuss any report with medical experts that we have in the office that are doctors themselves and then we'll make a decision that sort of protects our customer but also protects LV=.

(Chloe) When we receive an application, we will have a look at it and we'll review all those details. Sometimes it's reviewed by an underwriter. Sometimes it will just be accepted straight away. When it's reviewed by underwriting, it might just be for a specific medical condition or a hobby, would need to check the details of, so we'll often call the customer or call the financial adviser to check those details. Sometimes it's necessary that we write to the doctor and get a doctor's report. Once that doctor's report comes in we review all of the details and we use our specialist guidance to decide how we can offer the cover. Whether that be with an increased premium or an exclusion for medical condition. Maybe it won't be any change to the terms at all, and it's not very often that we won't be able to offer the cover at all.

(Jake) So the majority of cases are unfortunately delayed just due to the quality or the quantity of information given at the point of application. So it's important that as a financial adviser you make sure that there is the correct and relevant information given when the application comes through to us.

(Chloe) Sometimes our cases can be delayed because we're writing to doctors, and a majority of those doctors are NHS employed so their caseload is already huge and then we're adding to that. That can occasionally mean it’s a bit slower to get the reports back.

But we always encourage customers to send us copies of their specialist letters and their doctors reports if they have those and that will help us speed up the process.

(Jake) So for financial advisers who submit work at LV= we have an on online tool called Fastway and that allows them to go on look at applications and it will show them an indicative response. This means that we have to see exactly what medical requirements are needed. It will give them a question set for whatever medical condition the client has and what questions they need to ask them and also give them an indicative decision which will tell them if there's any particular variant applied on that policy.

(Chloe) The tools that we have available are our pre-underwriting tool that's on our Adviser site. What that helps with is to give the customer an indication of what we might need to get through the application process: that can be doctors reports, medical exams, and it will also help give an indication of what decision to expect. That might be a loading or an exclusion or it might just be on standard terms, so helps prepare the customer before we start the process.

(Jake) An adviser should support the underwriting process by providing realistic turnaround targets to their clients. This means providing with information what's realistic going to happen, in terms of how long a medical report will be taken to be received, what the underwriting turnaround time is, what decision is likely to be made. And this just ensures that the client is willing and knows what is realistic.

(Chloe) There are a few challenging areas. Probably my most challenging is when customers or financial advisers aren't happy with the decision that they've received. This is usually just because it's a bit of a surprise to them because they're not familiar with the underwriting process. What I would say is to use the pre-underwriting tool before applying and that will give an indication of what to expect, whether that would that be a decision or what evidence we might need. And also I just tend to then explain the process, explain why we've made the decision and how we've made that decision and then that usually does resolve things for them.

(Jake) So the most challenging part of underwriting is just the sheer quantity and the differences of medical conditions we have to deal with day in and day out. A lot of these things we might not have heard of before or we have to refer to senior members of the team such as our chief medical officers. These are people who are doctors in their own rights and they obviously have a wealth of knowledge that they can use to pass down to us to help us make informed decisions.

(Chloe) So within the last twelve months we've hired lots more underwriters and that’s to help with the demand and support financial advisers. We've also changed our application questions which is a big change for us. It's just to make them simpler to understand and also to encourage customers to make their disclosures.


Claims Assessors at LV=

Our job is to primarily assess, review claims as they come into the department. And the first port of call is with our assessors support and they'll identify that they have an in-force policy and that there are no exclusions that preclude us from looking at that claim.

So, when it comes through to us we’re able to go into that conversation with the customer, build a rapport talk, about the claim, while that why they're off work and identify solutions almost straight away in that call.

Personally, I think the attributes that make a great claim success for me would be patience. We shouldn't assume that they know how the insurance industry works. For some people, it is the first time they're putting in a claim. They have this misconception of insurance industry that making the claim is a hard thing, they're not going to get a payment. But if you have the patience to explain everything to them I like throwing the figure at them that over 90% of our claims get paid.

As a claims assessor, we get all kinds of situations, that some of them are from what I would say ‘the norm’. We do get valuable customers the phone in and they're in dire straits and as a human being yourself you have to be able to adapt quickly to help that situation. Trying to get access to those treatments and therapies that are going to help those people can be quite lengthy. The waiting times again for those things are increasing.

If we can identify through our phone calls with those customers where we think that treatment is going to help and these people wanting treatment, they're wanting to get better then we can liaise with Innovate Healthcare, find people in their area and get them the assessment and then the treatment that they need to get them back to work as a lot of these people do want to get back to work.

They don't want to be feeling this way. They want to carry on as normal

We’re able to identify those situations where we can offer help through our rehabilitation partners, Innovate Healthcare. We do have customers the phone in and they've hurt their back or they've pulled a hamstring in the leg or they're dealing with a mental health issue. Unfortunately, the NHS being in the state that is accessing those kind of treatments or therapies that could help someone on their way to rehabilitate, the situation can be quite time consuming.

We'll get a feel for them whether physio has already started or not or whether cognitive behavioural therapy has already started. If it's started the system's working, we’ll leave it, if they're not being seen regularly enough or they don't feel they're getting any benefit, or we've been told there is a three-month waiting list in their area, we will mention to them that we have our rehabilitation partners, and would they be up for us finding someone in their area?

It doesn't even have to be in their area. Some of our customers are immobile but we can offer virtual therapies now through Innovate Healthcare where it doesn't have to be them making an appointment to go round someone's house or someone come into theirs if they’re feeling uncomfortable with that or not able to, actually having some therapies online is proving useful to some of our customers now. We've also got our member care line support and LV= Doctor Services that we can refer to customers

The most rewarding element of our job, is telling people that we can help them. Sometimes it isn't financially through the benefit of the policy. Sometimes it is giving them those avenues and routes to access help that's needed there and then. In the short term the benefit might not be payable for a few months, and our customers do understand that. The views you got some sort of arrangement in place to receive money for that period. And yes, the financial benefit the policy does help them a lot, but when you want to get someone feeling better, better about themselves, better about their situation, telling the customer that, you know we're not closing the door we're opening it to them. This is the stuff we can help you with, is great.

We've had carpenters that have lost their hands. They're not going to have to do that job anymore. They might get adaptations but it's going to be a lot harder for them. Seeing that we can offer vocational we have to them where we would look at their skillset, help them with their CV. Find jobs in their area that they can do. That's something that they're surprised with that we can talk to them about, and that's something they're really keen on when we can offer it. And giving people that kind of news, some people will look at doom and gloom like “I can't do my job anymore! What am I going to do?”

When we can tell them this is what you can do, this is what we can help you with, they're really surprised and thankful of the help that we can offer them.


Working together with Innovate Healthcare

At Innovate Healthcare we specialise in vocational health services. What this means is we conduct specialist assessments conducted by our team of health professionals to help explore how someone's health condition or injury may have impacted them especially in terms of their ability to work in line with their LV= policy.

These are individuals who are going through quite a challenging situation, challenging time in their lives usually related to a health condition or injury that's impacted them. In terms of the impact that has, it really varies person to person but typically involves debilitating symptoms restriction on their lives, both in their personal and work lives, but also a huge psychological component in terms of frustration, fear, worry, anxiety, about the now but also the future.

Each case is completely unique so we have to take it on its merits. We've done quite a lot of training with the claims handlers here at LV= to help them understand different services available, understand the different options and outcomes that can be expected. One of the huge components is that the claims handlers here at LV= have a lot of dialogue and close communication with their policyholders to really get to understand the unique situation, their bespoke needs and understand what will be the most beneficial route for each individual.

Where there's uncertainty about which pathway to take, the claims handlers usually have a conversation with myself or another member of the team at Innovate and we can work together to figure out the most optimum route of how to support that recovery and facilitate a return to work in some aspect as and when appropriate.

Mental health issues is quite a vast arena in terms of there can be those impacted directly by mental health issues or those where actually it's a secondary condition related to another injury or health scenario that they have or direct impact related to that.

In terms of the specific interventions it can really vary and it can be along the form of psychological , talking therapies, return to work support, and at times even career redirection, which is supporting people to look at other options, other pathways available to them.

So when we've been supporting someone and they've managed to return to work for us it's really about making sure that that's sustainable. So if we've been providing some case management support we really look to make sure before we step back that everything is in the most optimum situation and that the individual has everything they need to move forward with that positive future.

If there's a scenario whereby somebody has a relapse of a condition or a new health condition arise we really do encourage that they pick up the phone to LV= and talk early stage about the challenges they're experiencing because it may well be that we're able to get back involved and provide support where that's needed or appropriate. There are some scenarios where actually we continue working with an individual even though they're back at work perhaps in the form of physiotherapy or talking therapy, for example to help further manage their condition and aid that recovery pathway.

The most rewarding aspects of my job when it comes to working with LV= without a doubt is about making a difference and an impact to the individuals who really need them. Coming back to that point from before, in terms of going through a really difficult time in their lives. Associated to that is about the team that I'm working with, as you can gather I'm quite passionate in terms of providing that support and here at LV= I find that everyone I'm working with has the same drive, same passion about getting those interventions in place at the right time and in the right way for your policyholders.


LV= Doctors Services

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 the 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.


Supporting your client with Income Protection

We know that when you're recommending income compensation to your clients you want to be sure that they're getting the right cover that fits their unique needs.

That's why our range of income protection solutions have been designed to protect your client whether they're working, not working, or getting back on their feet. Our income protection is easy to understand, all the features come as standard.

So your client can access our great benefits including Parent and Child cover, Rehab Support Services, LV= Doctor Services and more at no extra cost, covering them against more of life's challenges. And we have a range of options to suit different client needs. As well as our full income protection we now offer a budget version with a 12 month time period as well as our current 24 month budget option.

This gives your clients all the same features as our full version but their claim period will be capped at 12 or 24 months depending on their chosen option. Find out more by visiting the adviser site or contacting your account manager


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:

or clear business debt that would have to be repaid due to the loss of a key person

help cover recruitment costs

make up any loss in profits and keep the business running whilst you're looking for a replacement

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.


Beware of the cliff edge: How LV=’s smoothed funds protect your clients from extreme volatility

Explore how our investment strategy and unique smoothing process make our Smoothed Managed Funds uniquely stable versus others in the sector.

Please note, we can only offer CPD certificates to attendees of our live webinar sessions at this time.

Download the slides for Beware of the cliff edge

Watch the recording for Beware of the cliff edge

Beware of the cliff edge: how LV=’s smoothed funds protect your clients from extreme volatility

Chris Hudson, Savings & Retirement Sales Director:

Good afternoon everyone, I think we’re going to start now but we’ve got a number of people still joining. But I'll just go through my preamble so welcome on the US Election Day special version of our Smoothed Managed Fund webinar. This is the third one of the sessions that we've run over the course of autumn. And I guess like a lot of people who are joining, all of the presenters talking today from their home.

2020 has developed into a year of uncertainty and volatility, it's fair to say. And actually, what we're talking to you about today is particularly relevant and the sessions that we ran in June, were well attended, and these this webinar series has been well attended as well.

We're going to talk to you today about our Smoothed Managed Fund and kind of the expertise that's been LV=’s best kept secret for a number of years in a sector, which is dominated by kind of one fund. LV= actually in 2020 has become the real leader in this sector and we'll talk you through that today.

The aim for today is for us to demonstrate to you that it's something that absolutely should be within your consideration for your clients who are in this sector already or considering investing in these types of strategies. We have a couple of our competitors who are signed up to the seminar today so welcome to the individuals from Prudential and Aviva who are listening in on ‘listen only’ mode.

We'll take you through a bit of a journey. It will take about 40-45 minutes we should have time for questions. If you do have a question there's a chat function on the right-hand side of your screen. So, if you put your question in there, we will absolutely do our best to get through them all but still making sure we finish within time. And if there's any questions that we don't have a chance to get around to, then I'll make sure that they're answered to you after the event.

Just to give you a quick run through - Kirsty Wright, who's our Head of Propositions will be talking through 2020 so far. And she'll hand across to Adam Ruddle in LV=’s investment practice, who will talk to you about our strategic asset allocation calls and how they've how they've impacted positively on the fund. We’ll hand across then to Matt Reeves from Columbia Threadneedle Investments. He'll give us some market context and positioning, and then we'll put you across to John, who's our Senior Business Development Manager in the North, who will talk about making it count for your clients.

We will email you a copy of the slides, at the end of the session that will come through, and in terms of this counting towards structured development, there will be a questionnaire that pops up when the webinar finishes with just a few basic questions in it. And if you could complete that then we'll make sure that the relevant attestation comes out to you at the end.

In order for it to, to count towards that kind of continuing development they're some objectives I don't intend to read through them. I think you can probably all see what they are, but we'll aim to make sure that these are fully covered, checked in the questions, and then will become part of your continuous professional development certificate that comes out. So, as I said, as we go through we should have some time for questions, please use the chat function, or you can email [email protected] and we will follow up with you, either if we can get it in during today's session or after the event. So, as I said thank you for your attendance, I know that you'll get a lot out of today's seminar, the feedback from the previous webinars that we've run has been really really positive.

So, without further ado, I will hand across to our Head of Proposition Kirsty Wright.

Kirsty Wright:

Thanks, Chris. And thank you everybody for joining us this afternoon. During the webinar today, we'll be taking you through what's happened and happening in the market, the impacts of the financial crisis in general, and specifically in relation to our Smoothed Managed Fund composition, as well as why we believe it provides a compelling investment option to be considered for your customers.

You'll be hearing from our own investment team here LV=, as well as directly from one of the fund managers at Columbia Threadneedle Investments, who are responsible for the assets in our Smooth Managed Fund portfolio. They give you their views on current conditions, and how we are placed going into the future.

But before we get to that, I just want to go through the key purpose of the Smoothed Managed Fund proposition, and who we believe it's best suited to. So, the Smoothed Managed Funds are designed to provide exactly what the name suggests: a smooth investment journey, without the extremes of market volatility.

The funds are aimed at customers that are uncomfortable with financial uncertainty, and those who would find it difficult to stick with a volatile investment journey.

They're built for customers who need to feel safe that they're protected from the worst-case scenario, even if that means accepting lower growth on their investment.

They can be used for a customer's bond or ISA holding, the whole of a customer's pension investment, or as part of a portfolio to provide a sleep-easy option, alongside other investment targets in growth, or simply as a way of diversifying investments.

The sleep-easy route can be particularly relevant to customers in the really crucial years on the approach to, or in, retirement, where capacity for loss has reduced and the need to mitigate the risk of such as losses increases. Our funds are suitable for customers accumulating or consolidating on the approach to retirement, as well as those already starting to draw an income from their pension pot.

So, in a nutshell, they're designed for lower risk customers who are concerned about losses and volatility.

So, moving onto the next slide, and looking now to how the funds have performed in this most extraordinary of years.

When we last ran this webinar, back in May this year, we were just coming out with one of the biggest market shocks this century. And we were pleased to share with you that the Smooth Managed Funds had performed exactly as intended. They had protected our customers from the worst of the market volatility and downside, and indeed that we were the only smoothed provider to withstand that turmoil, without snapping down. Now here we are, over six months on from that, and what's changed?

Well, the funds continue to perform in line with our expectations. They continue to deliver as they are intended, to provide a comfortable investment journey and a safe haven for our customers, which is especially important this year, when they have many other significant worries and uncertainties to deal with in other aspects of their lives.

The graph we’re showing here demonstrate how Smoothed Managed Funds performed during the worst market conditions, earlier this year. But this isn't a unique example of how our smoothing has stood our customers in good stead.

If we move on to the next slide, as you can see here in the second graph that we're sharing, we can track back as far as before the 2008/2009 financial crisis, were once again, our proven smoothing mechanisms held firm for our customers.

So, our smoothing mechanism has been through two significant crises, as well as the more usual turmoil over the years, and have never had to be suspended.

Compared to other funds in the sector, our greatest stress tolerance has enabled us to provide a genuinely smooth investment journey for our customers, at a time when markets have been on a ride enjoyed by only the bravest of thrill seekers, and some funds have seen what can only be described as cliff edge fall.

Having to explain to a customer in drawdown why their low-cost passive investment or their low-risk smoothed investment fell over 10% on a single day can't be an easy conversation to have. And with general anxiety level heightened across all customer bases, it’s yet more significant worry.

Our unique approach to smoothing, where we look back over the previous 26-weeks of actual performance and simply average it out, doesn't defy gravity. It does enable us to create that smooth journey. We're not trying to predict the future in an unpredictable world. That means we have provided our customers with an investment journey that contains no nasty surprises affording them the peace of mind to focus on other aspects of the current crazy world, safe in the knowledge that their Smoothed Managed Funds are not on a rollercoaster ride.

But as well as focusing on making sure our funds continue to deliver for our customers, we've been listening to feedback from you, and John will be talking to you in more detail later on about our latest exciting developments in the proposition, enabling you to access the funds as assets for other SIPPs and SaaS’ through a trustee investment plan investment plan.

Through the new TIP, we've also taken the opportunity to introduce a change to the approach for the initial six months of investment. And many thanks to those of you that supported the research we did on this earlier in the year, as we were testing out different approaches. That change means customers will start their smooth journey from day two of investment, where we will take the average of days one and two. And this will build up gradually each day as we introduce what we're calling gradual averaging, up to the 26-week point where the current smoothing mechanism kicks in and continues as it does today on a rolling 26-week basis.

This approach is initially introduced on our new product, the TIP, and we'll be following it up to introduce it across the rest of the proposition in Q1 next year. And we'll revisit that with full details at future events.

And now I'd like to hand over to Adam Ruddle, our Senior Investment Manager here at LV=. He'll talk to you more about the performance of our fund and how we've achieved it. Adam, over to you.

Adam Ruddle:

Great, thanks Kirsty, and hello - thank you for joining us this afternoon. My name is Adam Ruddle and I head up the investment group at LV=.

In today's webinar, I'm going to cover our strong and stable investment performance, and our very strong sector performance. More importantly, I'll try to set out how we were able to generate such a robust and resilient performance.

2020. Well, it’s not been the year any of us expected. In the market: volatility peaked at an all-time high in March. I think it will be helpful to very quickly and very briefly consider the market journey so far this year, giving us some helpful context as we continue through the webinar.

We'll use US equity markets as an example. And you may recall that we started the year with strong performance in January. Boy, by an easing of geopolitical tensions in December, progress in resolving the US/China trade tensions, and then much nearer to home, political stability in the UK following the general election results. Interrupting the good momentum, a distant virus caused China to go into lockdown on the 24th of January.

Markets stumbled, we began to worry if the Chinese lockdown meant production delays, would we have to wait for our new iPhones, this year? But other than that, markets didn't really take the virus too seriously.

That all changed after the February half-term, as the distant virus arrived on our doorstep with cases identified in Italy where many from this country had gone on holiday.

A month after China, on the 24th of February, Italy went into lockdown. Markets were truly rattled. The Fed responded the fastest, cutting rates by 50 basis points on March the 3rd. Some improvement, before equities detracted further.

When on March the 9th Russia and Saudi Arabia battled over oil prices: eventually pouring oil on an inflamed market with an oversupply of cheap oil. Markets continued to fall, and the Fed cut rates again on March the 15th, joining a slew of central banks around the world taking swift action. Notably the 50 basis point rate cut by the Bank of England on March the 11th.

But it wasn't just monetary stimulus either. On March the 10th Japan announced a 430 billion yen of additional spending. On March 11th, the UK Government announced a 30 billion Sterling stimulus. We had to wait a bit longer for the US and Euro regions to get their act together.

Markets continued to fall down though, and on March the 23rd the Fed announced unlimited quantitative easing. Central banks were, it seemed in their words, doing whatever it takes.

They say the market stopped panicking when central bankers do. And following these huge fiscal and monetary stimulus packages, markets started to recover, boosted further by the 2.2 trillion US dollar aid package passed by Congress on March the 27th. Markets then started to surge.

By the end of April, the s&p 500 had notched its best month since January 1987. The recovery was powering ahead. Some analysts said our worst days are behind us. But in my view, there have been serious risks to economic growth. And we saw a significant market wobble just last week. So, we are perhaps not out of the woods, just yet.

We saw in July, that US unemployment claims rose sharply echoing economic challenges across the world, with more redundancies and bankruptcies and the lost jobs. Tech stocks faltered in September, as it emerged that some of the momentum was artificial where the Japanese conglomerate SoftBank had taken large speculative positions on US tech.

Markets took a breath, cases started to rise again as schools and pubs reopened. This chart goes to the end of September, but we've seen the market fall further through October, as the reality of a second wave hit the markets, and in less than 24 hours we will hopefully know who will be in the White House next year.

The worst-case scenario for markets is a contested election. Just last week, the s&p 500 fell 6.1%. The footsie100 was down 5.8%. A few minutes ago, it was back up at about 3.5% over the last two days. So clearly unsteady markets at the moment. And the point of this slide is to show you that we've gone through great uncertainty this year, more generally.

Well, how have we fared under such volatility? A good set of figures. Slightly subdued as you'd expect, given the roller coaster year we’re on. But up to the end of October, let's look at our best figure 5.98% annualised over the last 10 years for our FGB growth product. That's pretty strong: it translates to about 17.9% return over those 10 years. That's fairly impressive given the strains of 2020.

Few predicted that the markets would fall sharply and as deeply as they did in March, and there's been stark division whether there would be a V-shaped recovery or a U-shaped recovery…W…L…K-shaped. Let's just throw some more letters in, would there be any recovery at all?

Well our asset managers Columbia Threadneedle Investments, who you'll hear from shortly, were very clear on their views. They expected this recovery, and as a result they had us well positioned to participate in it. Look at these underlying returns, double digit growth that is still to seep into our smoothed prices fully over the next six months. This shows that our performance is not resilient because we've hidden all of your money in a mattress during a crisis. It's robust too: we're able to grow your money, your clients many strongly.

You may never have heard of Bernard Baruch, but he was one of the very few millionaire US investors who not only survived during the 1929 Great Depression, but thrived during and after it. He said, “In investing, it's not about how much you make, but how much you don't lose”. That resilience and investing where you're able to cultivate robust performance when times are good, but can also defend your investment when the market turns, is critical. And many of our peers were caught out during the market turmoil in the first quarter of the year.

Here's a graph we covered at our last webinar: a hypothetical investment of £100,000 at the start of 2018. Now these are comparable products with similar levels of risk and equity-like content. But when we looked at this graph in May and June at the start of this year, Pru and Aviva had lost value whilst we were still giving a good positive return. Following some upward unit price adjustments, now, under all of these strategies, the £100,000 investment has grown, before charges. We remain top of the sector, providing a robust and resilient return of 10.6%.

Importantly, notice on our green line that there's a gentle upward climb as we get to the end of August and into September. That means that any negative performance from Q1 has been fully smoothed into our prices. And now the recovery, those double digit returns that we saw earlier, are starting to strongly improve value. And we see that in October's figures as well as the green line continues to shoot up, despite October's volatility. So that market turmoil, only caused a brief ripple in the performance for Smoothed Managed Fund customers.

Another feature I found interesting was the inflationary pressure. So, to purchase £100,000 worth of goods from the start of 2019 would now cost you about £102,000. That means that Pru’s performance and Aviva's performance in real terms, this investment has lost money. It hasn't kept up with inflation: poor returns and looking at the 2020 cliff edges of volatile and uncertain journey.

Now, you may think we've cherry picked 2019, but the same is true over the longer term. Our comparable products deliver a stronger and more resilient return than the Pro.

Well, once we show these figures and set out our performance and the smooth journey for customers, because we've never yet had to break our smoothing, the next question I often get is, how did you guys do it?

The answer involves the way that we've designed and distributed our products, and our investment philosophy. And if I focus on the investment side, it starts really with our strategic asset allocation - sometimes called our investment strategy - and the changes that we made in 2019.

Now, in 2019, we had no idea that a global pandemic was around the corner, one that would shatter families disrupt economies and really change the world as we know it. Of course, we didn't, but we did think that some sort of market shock or adjustment could emerge over our SAA time horizon. We'd been in a bull market for a long time and there were some signs that we were reaching the end of this particular stage of the investment cycle.

So, within our SAA we wanted to create resilience to any market disturbance that can emerge. Our strategy was to significantly reduce our concentration of UK holdings. We shifted from developed markets like Europe, and move more into Asia, and emerging markets, and we introduced four new asset classes to give us stronger returns and build up our investment resilience.

We had some great recognition across the industry for this too - winning two awards off the back of this work, in particular the coveted Investment Strategy of the Year from the industry body Insurance Asset Management.

Now if you'd like more details on our SAA or a glimpse into some of our holdings, these are available on our website and in our investment reports that go to advisors every month, and we'd be delighted to talk more about it with you as well. So how did this new SAA work out for us over 2020?

There's a lot going on in this chart. We've rebased all of our asset classes and their underlying performance to 100 at the start of this year.

During Q1, we see that the new asset classes - the dotted lines - perform better than the other asset classes. And this really is the resilience of the portfolio coming through during times of stress. US Treasuries for example offsetting some of the negative equity returns.

And then after as we go into April, May, June, July, we start to quickly benefit from the recovery, in particular the light blue line denoting emerging markets that has outperformed more developed markets like Europe: the green line that's languishing below 100. And this really vindicates our shift away from developed markets like Europe, and into emerging markets and Asia. The elephant in the room is of course the orange line of UK equity. This asset class was hit harder by the virus falling further than the US, Europe and emerging markets. And then when everyone started to recover, the UK recovery has been very sluggish.

At the moment, the Footsie100 is down 23.4% year to date, while other regions have re-entered positive return territory. Now, there's many reasons for the UK’s relative underperformance firstly the UK investment scene is dominated by oil and mining companies and banks, and these sectors were hit hard by COVID.

And secondly, some of the companies that have thrived in locked down are overseas companies, the likes of Netflix, which is up about 50% year to date, Amazon, up 60% year to date, Apple up 48%, Alibaba 10%.

So, it's really a disappointing result for UK equities, but fortunately this is an asset class that we significantly switched out off in 2019. And this really is the main point of the chart: showing how the new asset classes, and the reduction in UK holdings massively stabilised their portfolio, whilst our shift to emerging markets brought solid growth.

The SAA which we developed with our asset manager Columbia Threadneedle Investments is the main underpinning to our investment philosophy. but good stock picking and tactical asset allocation are other elements that drive investment performance.

On the tactical asset allocation side we'll hear later just how well-positioned we were for the stellar returns of Q2 especially, but CTA stock selection has similarly been amazing. Now have a look at this. In Q1, when the markets were in what seemed like freefall, some of the CTI funds added further cushioning by not falling as hard as the various indices did. So that's the first graph. In the second graph we see the picture over the rest of the year has been similarly impressive, where markets are still negative in Europe and high yield, the expert teams at CTI haven't showed that we don't feel the full brunt of those negative returns. In the case of Japan, whilst Japanese markets are down 3.4%, they've returned a positive 10.5% year to date, and then emerging markets equity, where the index has grown 1.5% CTI’s fund returned, 13.7%, giving us an alpha positive return relative to the benchmark of 12%. 12% in this economic environment is quite simply remarkable. And it keeps this strategy as one of the best E funds globally.

One further point to draw out from what we've seen in 2020. In this graph I've overlaid the CBOE volatility index widely known as the VIX with a scale on the right-hand side of the slide. What does this tell us? Well, when market volatility is at low levels, in some regards historically low levels in 2019 and the start of 2020, it's easy for smoothing mechanisms to work, and for all products in the sector to give good returns. Of course, it's worth noting that our performance even in these good times surpasses our peers. But then crucially when volatility spikes, other smooth funds break, and can only really recover as volatility subsides.

My family and I relocated back to Wales recently. And one of the first things I did was buy a waterproof coat. There were many to choose from and I bought a fairly expensive one because I wanted to keep dry. It worked really well for occasional showers and for drizzle. But when the one the storms came in October, just last month, I got soaked. Another feature of Wales are the rolling hills and a neighbour of ours bought a certain branded electric bike, but unfortunately it couldn't cope with some of the steep climbs nearby.

Who needs an electric bike that works only on the downhills or the flats, or a raincoat that only works when the rain is light or a smoothing mechanism that breaks when it's finally tested? With Smooth managed funds, you get a product that can withstand high levels of volatility and deliver strong returns.

Well, what are our plans for the rest of the year? Firstly, not to rest on the strength of our 2019 strategic asset allocation. As you'd expect we re-examine the SAA in May to check it would hold up given any changes to our assumptions following the emergence of COVID. In Q4, we're going to kick the tires again and we're working to optimise future expected returns whilst ensuring that we keep the level of risk broadly unchanged.

We've also been working very hard behind the scenes on our ESG framework, and how we bring responsible investing to the fore in all that we do. Our new framework which we are pretty excited about was approved in September, and we hope you'll hear more about this shortly. Perhaps something we can cover in a subsequent webinar.

Well, thank you very much for your time and I'm now going to pass over to Matt Rees. Matt is the Deputy Fund Manager at Columbia Threadneedle Investments for Smooth Managed Funds range with responsibility for our tactical asset allocation. Matt thanks for joining us today, and over to you.

Matthew Rees:

Thank you very much. Good afternoon, everyone. I'm delighted to talk to you today, and I'm here to give you a quick update on our thinking currently.

So, as you can see on the slide in front of you. This is our asset allocation strategy view - the grid I like to call it, and this is a core part of our process that is debated every week by our asset allocation Strategy Group, and everyone feeds into the process and come out with this, and this is a house view, if you like, and then, Alex Lyon and myself, seek to position the Smooth Managed Funds sympathetically to this grid. So, you can currently see we're long equities in credit you'd expect on the grid and you'd expect the funds to be positioned overweight, the SAA that that is provided by Adam and his team. Now, we do remain long risk assets, and we favoured equities through March and April. And after the pandemic struck and equity markets were rocked our key theme for remaining that favoured position was that we did expect the impact to be very large on economies and people. But ultimately, it would be a temporary effect and we expected to come out and come through the pandemic clearly, we're heading back into lockdown this week in the UK, but markets did turn the corner, and start recovering fairly rapidly so in, in hindsight, we were storing our overweight positions at pretty good levels in equities. Now credit we also like, you can see as is in the favour box there on top.

Now, spreads that's the yield of credit bonds over government bonds, these widened out to very attractive levels earlier in the year when, when the risk of moves occur. And these are kind of levels you don't see that often, maybe once every 10 years back in the great financial crisis with the last time high yield markets got that wide and investment grade two. And we went up to favour, and both of these assets equities and credit, the stimulus was a really big reason for us moving and staying long, both on the monetary side - so we saw rate cuts and asset purchases from central banks - but also fiscally so think about the furlough schemes and the like have been very helpful for economies and markets. Now, going back to credit.

The narrowing of those spreads has pretty much occurred now, but we are back to roughly average levels, and so the carry you earn from credit bonds or funds as we invest in is worth it given the stimulus and support that is still there at present. Property you can see on the grid we are neutral. Now, the point here is property is a bit of a challenge asset class. Clearly working from home is bad for officers looking forward, that's probably a structural negative, the likes of Amazon is bad for the high street and retail. But, in our fund, we're positioned pretty well and we're overweight the kind of logistic, and warehouse and underweight retail. So we think our fund is positioned well within property, which is kind of why we're neutral on the grid, and our fund has reopened. And it was one of the first reopened and it's still open at the moment so we are able to trade in that fund every day, if we wanted to.

In terms of dislikes we're currently underway, government bonds on the top left of the grid. Now, rates are very low currently, and we're unsure of the value they offer as a hedge to risk markets are these current low levels.

You may be wondering about negative rates are they coming to the UK? Well, there's two things to say here. We think the Bank of England would still prefer to go down the quantitative easing or more credit easing route first, but clearly in that area they are running out of a bit of stimulus space, and given the outlook, it looks like they’ll need to do a bit more. And so, possibly next year, and actually we now think next year, the Bank of England will put brakes marginally in negative territory. We don't expect it to be early next year probably towards Q2 or Q3.

But this is fully expected by markets, in terms of the interest rate structure pricing, so the guilt or bond market is unlikely to get a particular boost from any movement into negative rates.

So back to equities, why remain long now? Well, if we jump on to the next chart there's two things I'd like to highlight here, first of all we're positioned largely in good quality growth companies that can thrive. Think Visa, MasterCard, Amazon, they will be doing very very well in the current in the current environment.

And also looking look at the bottom left chart. This is the percentage of companies that were beating Q2 earnings estimates and you can see they are at 84% in the US and 62% in Europe, that was very encouraging news to receive in Q2. And whilst we've been going through Q3 earnings season the information coming out has been positive there as well. So, the corporate news has been on the positive side.

And secondarily, central bank purchases, on the right hand side have been very, very large, this is that supportive stimulus element, I've spoken about earlier, and you can see clearly how much per person purchases have been up at the $6 trillion level, and it just dwarfs the previous levels of asset purchases run by central banks that we saw in the great financial crisis, and in around about 2010 and subsequently in 2014 and later as well.

So, corporate news has been coming out okay on a quarter to quarter basis, and the stimulus is still there. So, what risks do we see? Well, there's four kind of key ones I'm highlighting on the next slide. Clearly, an extended lockdown from coronavirus second wave is going to hamper activity again. But, to a certain extent much of economies are used to working from home now and a transition has occurred, but still, if lockdown is much much longer than we currently have here and also, we've seen lockdown in France and Germany too then that could be a negative effect to risk markets. Brexit is a big risk for UK domestically. If no deal comes to pass. Currently whilst not being in the tunnel in terms of negotiations, it does appear that we're eking our way towards a deal at the moment.

US, China trade relations clearly over the last three four years or so have been a big issue for markets at times and cause bouts of volatility or sell offs in terms of equity markets. But China is turning more domestically-oriented, and maybe the result of the presidential election the other risk or highlight, could mean a bit of a softer tone to negotiations. Now clearly, it's US election day to day. Biden is leading in the polls and statistically he's, he's likely to win. It would need a polling error for Biden, not to win. But polls have been wrong before.

So, one of the key announcements if anyone's staying up through the night, we expect one thing to watch will be between midnight and 2am this morning is when Florida and North Carolina are expected to declare results. And if one of those is won by Joe Biden then t our analysts tell us the probability of Biden winners, well the conditional probability, would be over 99% so those are two key states, declaring around the middle of the night.

In terms of effect or outcome from the election, it’s worth remembering Biden is not Elizabeth Warren, or Bernie Sanders – he’s much closer to the centre.

Potential negatives of a Biden win would be – well Trump cut corporation tax from 35% down to 21% and that could retrace by half which would be bad news for companies, we could see capital gains tax increases, which would lead equity holders to maybe sell out of some of the positions to avoid larger tax burdens. You could see income tax increases for the wealthy, as well.

And maybe greater regulatory oversight of financials and polluters which would again be negative for those businesses, but the positives would include boost to spending for infrastructure, clean energy and health care. The old economy stocks should benefit, as opposed to, as opposed to tech. And you could see an increase in the middle wage as well maybe that $15+, and also a less combative approach to trade talks.

So, net for markets, overall as an index level, then we don't think once any shakeout has occurred, we don't think there'll be as much in it between Joe Biden and Donald Trump, it’s more the underlying stock or sectors that could can be greatly affected between who wins the presidential election. Our worst case, as I've said earlier, is a disputed result. After the Bush/Gore contested result, the US market fell some 7%. So, that's the one where we're watching out for. Now I'm going to pass on to Jon Kidd who’ll provide more detail on the fund performance and resilience fund. Thank you very much for listening.

Jon Kidd:

Thanks Matt and good afternoon everybody. Yes, my name is Jon Kidd Senior Business Development Manager at LV=. So building on the content you've already heard from Kirsty, Adam and Matt, I'll spend the next 10 minutes or so bringing the funds to life in more detail by drilling down further into key aspects and attributes of our range of Smooth Managed Funds, highlighting the funds reassuring performance and resilience, as well as telling you about an exciting new way in which your clients can access our funds and benefit from our unique way of smoothing.

So, let's just start by looking at the type of clients who typically benefit from investing in our funds. Now this isn't an exclusive list by any means, but the type of clients who are often placed in the funds include the type of individuals who want to ensure investment downside is limited, investors who wish to avoid cliff edge drops in fund performance, and also those who may be unsettled by volatile investment journeys.

The funds work well for those who want a single fund solution to de risk their investment approach, especially for those who are entering late stage accumulation, or decumulation.

They are also a fantastic option for those clients who are concerned about stock market volatility, as they act as a great volatility dampner, working particularly well as a blended solution with a low-cost passive fund for example. Or, alternatively held as a strong non correlated defensive asset within a wider investment portfolio. Ultimately the funds are incredibly versatile and suit many different clients across various investment scenarios.

So, for those of you who aren't familiar with our funds. We have three smoothed funds, all available across a range of tax wrappers. We have our cautious, our balanced, and our growth or managed growth funds which are risk-rated: three, four and five respectively with both Dynamic Planner and Defaqto, and are very much designed and managed to stay within these risk categories. Therefore, if you client invests in say our Balanced Fund, which is rated four, we expect that this will continue to remain at risk rated four fund the duration of their investment. For further reassurance, all of our Smoothed Funds are also five star rated by Financial Express.

The funds are also available across a range of tax wrappers that can be accessed through our range of LV= Pension and Drawdown solutions, including our unique guaranteed income drawdown option. They're also available by our onshore bond, which is available to individuals, trustees and corporate investors, via a standalone ISA and hot off the press the funds can now be accessed externally in the market for the very first time through our new LV= TIP solution. I'll be touching a little bit more on that later.

All of our smoothed funds are designed and managed to deliver in three key areas, firstly to generate strong steady investment performance over the medium to long term, to provide effective downside protection, and all of this feeds into a low volatility investor experience.

So, let's examine the performance aspects of the funds in more depth. The graph shown here demonstrating investment performance of our pension funds, since their launch back in July 2014 against their respective ABI sectors. The LV= Funds are seen here in green, and their equivalent sector is highlighted in purple, as you can clearly see the funds have performed strongly given at least sector average performance since launch. But importantly delivering these returns in a much smoother way. This leads to a significantly lower volatility investor experience, which may appeal to more risk-conscious investors, as well as income seeking clients.

So, when we compare our funds’ performance against one of our largest rivals in this space, we can see that they compare very favourably. This graph shows our three Smoothed Managed Funds highlighted here in green, yellow and red against the proof on Cautious and Growth Series II funds which invest in if you invest in direct through Pru’s retirement solutions.

To be transparent, the proof and series here is actually shown here net surcharges, and our funds are shown gross charges, which is unfortunately a quirk of how they’re reported on trustnet. However, in spite of this, you can clearly see since the launch of the bearish and approved fund back in September 2017, our three funds have performed very strongly against their counterparts over this period. We've not only achieved stronger returns during this period, but we've also provided a smoother, less volatile investment journey with no cliff edge falls in performance. We smooth on the way up and smooth on the way down through our unique retrospective smoothing mechanism.

So, when we compare against a TIP version of Pru Fund, which like our funds is shown gross charges here, we can see since the launch of our pension funds back in July 2014, we've provided strong comparable fund performance, but arguably in a more consistent way.

Once again, we've delivered this without those cliff edge drops in performance. Since launch our funds have delivered annualised returns between 5.1% and 5.9% per annum, which we're particularly proud of. However, we've delivered this with an incredibly low risk score. Our fund’s Spanish Express risk scores of five for our Cautious fund, seven for our Balance fund and eight for our Growth - for context the footsie100 as a fixed-risk score of 100. In comparison proof on cautious as a risk for 37, improvement growth of 42. This is over five times higher than our equivalent funds.

So, the low risk profile of our firms is further backed up by a comparison of these funds against over smooth funds since the COVID crash back in March this year. And as you can clearly see here our funds were not immune to market conditions. However, unlike our competitors who sold a sizable cliff edge performance jobs, our funds due to their unique smoothing mechanism held relatively firm and have started to recover strongly in recent weeks. As Adam mentioned earlier the strong performance of the underlying assets within the fund since March will continue to feed into the fund performance in the coming months for existing investors in the funds.

Downside protection is a key aspect of our funds, when some of our competitors have seen recent falls of roughly 10% to 14% in a single day, the largest daily fall over the last five years within our funds has been between 0.09% and 0.14%. We're very proud of the exceptional downside protection our funds provide, and I'm sure it's been appreciated by your clients in recent months.

I've touched already on the performance and downside protection aspects of the funds which are reasons alone to consider LV=. But another important key aspect is the low-volatility experience investors in our funds enjoy. This scatter chart shows our funds plotted against the TIP version approved fund and over the last five years.

We've already identified we perform strongly in comparison, but as you can see here we've delivered this performance with significantly less volatility. In fact, our managed Growth Fund has nearly 60% less volatility than its Pru fund equivalent over the last five years, and outperformed that fund by 25 basis points per annum.

When you look at it like this you can see why the FE risk of our funds is five times lower than their Pru equivalent, and up to 20 times lower than investing in a footsie100 tracker. To prove this isn't a fluke we can see the same view here over a one-year period. Our funds stand out against their peers clearly in terms of comparative performance. However, even more so when comparing the annualised volatility figures, with our funds seeing a relatively small increase in volatility over the last year compared to our five year figures.

However, our competitors in this space have experienced a double whammy of significantly higher volatility, combined with poorer comparative investment performance with both proven growth, and the Aviva smoothed managed funds in negative territory during this period.

This all feeds into this low volatility experience investors in our funds have historically enjoyed. Hopefully you'll agree, the LV= range of Smooth Managed Funds are worth a closer look.

So, as I touched on earlier, our fund range has been further enhanced recently, in response to adviser demand. I'm delighted to announce you can now access our market leading smoothed funds through a TIP, SiPP and SSAS’ investors. This provides access to our funds outside of an LV= tax wrapper for the first time, providing all the benefits we've discussed today.

So, as a result, we are now offering our usual three smooth managed funds to designated members of external SIPP and SSAS schemes.

The TIP versions of our funds are all priced at a competitive AMC of 1% per annum. with discounts of up to 15 basis points available for larger investments. By way of comparison, this means we're coming in roughly between five and 10 basis points per annum cheaper than the equivalent Pru fund TIP.

So, within the TIP version the underlying funds are exactly the same as our current pension versions. However, based on our adviser feedback, we've introduced a new way of managing the funds during that first six months, which we expect will reduce year one volatility, even further.

Our current smoothing mechanism sees the funds based on their underlying price for the first 26 weeks, the smoothing then kicks in at that point, and then move on to the average price which continues to smooth returns on a rolling 26-week basis.

On our TIP version, we're now introducing smoothing from day two, which will provide gradual averaging over the first 26 weeks as follows. So, on day one unit of prep purchased at the funds on the line unit price, day two, the underlying unit prices for days, one and two are added together, divided by two and these produce the gradual average price. Day three, the underlying prices for all days are added together and divided by three, and so on. This gradual averaging process continues until the 26-week point and a week 26 your client automatically moves on to the average price, which continues to smooth returns on a rolling 26-weeks basis as normal.

We're really excited about the launch of the TIP version of the funds and your LV= business development team will happily provide further details following this call.

So hopefully you found that useful. I'll now hand you back to Chris. Chris, over to you.

Chris Hudson:

Again, thanks so much Jon, and thank you I'm very very conscious of time, and had a few questions come in, which, which we'll try and cover there be some that we just won't be able to cover if we're going to finish up.

I guess firstly before we go into them. My first question is going to come across to you Jon, so strike a pose. We've talked a lot about the Pru in our presentation, it's not a case of Pru bashing or anything like that. If you look at this sector, there are three main people in it: there's Prudential, there's LV= and there's Aviva. The Pru are the Goliath by a long way and have been recognised and are very prolific in this in this space. So, all comparisons, on any kind of sort of length of performance will always unfortunately come back to them.

But I think we make a strong case for consideration. Jon just a couple of quick questions for you. Firstly, I know you covered it with regard to TIP, but a question that we've had him from one of the attendees today is: Is your fee structure lower than the Prudential?

Jon Kidd:

Yeah. Thank you, Chris. Yes, typically, it is. It really depends on the version of the funds that you're looking at. We already talked about we offer across a range of tax wrappers as do Prudential, but yes typically we do come i, more cost effective in most areas. Not all, but in most areas especially when you compare the price of our wrapper as well.

Chris Hudson:

Okay, that's great Jon and secondly just another question from one of the attendees today: how does your approach complement the Prudential approach?

Jon Kidd:

I think that's a great question. I personally think it's just looking at how the two different companies smooth, and how the two different propositions could potentially work in tandem.

Even though we're talking about two different smoothing funds, you know we're not comparing apples with apples. So our smoothing mechanisms we've talked about already is retrospectively. Whereas, obviously Pru are looking into the future, they've got that basket of assets and are predicting 10 to 15 years in the future. And I think, potentially having a blend of the two can actually work really well for certain types of clients and a lot of advisers use that in investment bond investments for example, but yes I personally think that both funds have the merits. But I think the key thing for us is you know that retrospective smoothing mechanism has proven its worth over the recent time, and also backs into the launch of these funds as well.

Chris Hudson:

Okay, Jon that's great. Kirsty, if you could come off mute, just a couple of quick questions for you.

Did you protect this year by LV= absorbing the drop from your own coffers?

Kirsty Wright:

No, absolutely not. Our smoothing mechanism is very clearly laid out in terms of when we will suspend it, and the unsmoothed price has to fall below 80% of the smoothed price. And so we have a greater tolerance on our smoothing funds than some of the others out in the market so when we absolutely didn't use the LV= coffers. We apply our process and we apply our principles and we stick by the rules that are set out to govern the fund.

Chris Hudson:

Okay, that’s brilliant, and one last one for you Kirsty. How will you protect against large corrections in these funds in the future?

Kirsty Wright:

As I mentioned, we have a very clear rule around what would suspend the smoothing mechanism and that is the underlying price to fall below 80% of the smooth and if we reach that point, at any stage, then smoothing can get suspended. We do have some discretionary options around the fund as well so if we see significant outflows, we have an ability to protect the investment for the remaining invested in that fund. But again, we monitor those positions really really closely, they’re long term investments and short-term volatility. The idea of the smoothing is that we can write out the short-term volatility. And hopefully, then customers will stick with those funds over the longer term and certainly that's what we saw through the turmoil in the earlier part of the year.

Chris Hudson:

Okay Kirsty that's brilliant. There's few more questions that I have that we're not just going to get time to get through today. So, we will come back to the people that asked them and make sure that it's shared.

I guess in summary, I hope that we've demonstrated to you today that actually what we're talking about is even more relevant for your clients in 2020 and beyond. Underlying Strategic Asset Allocation has delivered absolutely superior performance versus this sector. And CTI’s active view on markets has delivered stellar performance versus the benchmark performance we’re looking for.

I think Jon today just reassured us really where the performance has come from and whether resilience is. We talked about the low volatility of our funds which is in particular contributed to our success in 2020, delivering strong results for your clients and also, we do have an adherence to the risk rating, as Jon covered off in his slides as well.

And we kind of delivered slide after slide of superior performance and low volatility, and we'll send a copy of the slides out to you all of the information that's on there, and all of this statistics are sourced from independent bodies they aren't numbers that we've kind of made up and we genuinely have been proved to have the most resilient fund, over a particularly uncharacteristic volatile 2020, and I hope that's something that you could you could go ahead and consider.

So, we'll send you a copy of the slides after the recording, there will be something that pops up as soon as we finish in 30 seconds or so, which will give you the opportunity to fill that in and get your certificate of attendance. And any questions that we didn't get around to today we'll make sure that we answer those specifically with you. So, thank you again for attending. We've just come in under the hour by about 30 seconds so I wish you a pleasant evening, and we'll sign off there. Thanks again.


LV= Equity Release Underwriting Masterclass

Learn about the end to end application journey on the new LV= smarter equity release portal

Please note, we can only offer CPD certificates to attendees of our live webinar sessions at this time.

Download the webinar slides for Equity Release Underwriting Masterclass.

Watch the recording of Equity Release Underwriting Masterclass.

Image of slide one of presentation

Understanding Smoothing - LV= Smoothed Managed Fund range

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

LV=’s Smoothed Managed Fund range has a built-in smoothing mechanism 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 on speculation - making it 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 markets are falling or fluctuating, then the smoothing mechanism will help protect investments against sudden volatility.

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

Our Smoothed Managed Fund range can be accessed via our:

Pension (Flexible Guarantee Funds)

Bond (Flexible Guarantee Bond)

And ISA* (LV=ISA) products.

Find out more at LV.com/smoothed. Alternatively speak to your retirement consultant or call us on 08000 850 250.

Investment value can go up or down. Clients may get back less than they paid in.

*The LV= ISA is a non-profit investment therefore is not eligible for mutual bonus.


Hear how LV= and Columbia Threadneedle Investments collaborate closely in the management of our Smoothed Managed Fund range.

Hello, I’m Alex Lyle, Investment Manager & Head of Managed Funds at Columbia Threadneedle Investments.

We are a leading global asset management company, part of financial services group Ameriprise Financial, with more than 2000 employees located across 17 countries around the world, including 450 investment professionals .

We have a very long and deep relationship with LV=, one of our largest strategic clients, and over many years have collaborated closely to ensure that the funds within the LV= Smoothed Managed Fund range deliver the outcomes required to help achieve the expectations of LV= policy holders. The funds are split into three risk categories: Growth, Balanced and Cautious. These categories are determined by the extent of investment in equities, which carry a higher level of risk, compared to bonds, which are lower risk.

The asset allocation for each of these risk categories is modelled using views of expected returns and volatilities. The modelling involves thousands of asset allocation scenarios and the results are subjected to analysis and due diligence to reach the optimal allocation.

The underlying investments in each fund come from our extensive range of pooled funds, each with its own specialist, dedicated management.

We strongly believe in the merits of selecting in-house funds as it allows deeper risk analysis, keeps costs down and ensures greater consistency of strategy. Our investment philosophy and process are built around collaboration: we emphasise teamwork and integrated research. We aim to deliver superior returns for our clients through:

An active approach that takes advantage of market inefficiencies

Our perspective advantage – the combination of macro and micro analysis to establish our view of the global economic environment.

The appropriate allocation of risk

Our aim is to deliver consistently strong real returns over the long term, whilst carefully managing risk within each fund. We believe our long-term track record demonstrates our ability to add value through both stock selection and asset allocation, backed by the unique investment philosophy which underpins our business.

This involves a strong process, based on extensive teamwork from a wide group of experienced professionals.

If you’d like more information about LV=’s range of Smoothed Managed Funds, please speak to your LV= Retirement Consultant.


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.

Hi

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…

Smoothing

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!

Guarantee

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.

Summary

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 lv.com/adviser.

FOR UK FINANCIAL ADVISERS ONLY
Liverpool Victoria Financial Services Limited, registered in England with registration number 12383237. County Gates, Bournemouth, BH1 2NF, UK