Head of Intermediary Distribution at Wesleyan, Nick Henshaw, talks us through some of the key benefits of the With Profits Fund.
We understand that as a financial adviser, one of your most valuable assets is trust. Clients need reassurance that their financial future is secure, which means investing in funds and institutions that have a proven track record of robustness.
After all, the financial planning market is a people business, and your clients must have confidence that your advice is tailored to help them meet their financial objectives.
Seeking advice can be intimidating for those who may be unfamiliar with the landscape and language used. Plus, the stakes are high - your advice could affect the rest of their lives.
Memories of the Global Financial Crisis of 2008 - which highlighted multiple vulnerabilities within the banking sector - will not fade quickly.
So, what are the ingredients for steady, secure investment growth?
Strong and stable
Wesleyan has been helping people reach their financial goals for 182 years, and a large part of that longevity is down to the fact that we are a capitally strong mutual.
Without shareholders, we have the scope to invest with a long-term approach, removing the pressure to pursue short-term gains.
It also gives us the opportunity to control the amount of reserves we hold – currently £466m – directly impacting our financial strength*.
Our Solvency Ratio is currently way above the industry average at 373%. That’s up from 306% last year and means that Wesleyan is assessed as having enough capital to meet its customers’ needs, even in the most severe of circumstances*.
A history of delivering consistent long-term investment returns for investors means we are well placed to support the needs of financial advisers and their clients, especially in today’s challenging market conditions.
With Profits accessible to you
Our flagship With Profits Fund aims to provide capital growth over the medium to long term by investing in UK and international equities, bonds, commercial property, cash and other related investments, while avoiding sharp rises and falls in performance by ‘smoothing’ returns.
This fund can provide advisers with high equity content and the associated returns, but with more downside protection than a normal multi-asset fund as part of a portfolio.
When the With Profits Fund is performing well, some returns are held back and released to investors during periods when performance is poorer, helping mitigate any falls in value and making returns more consistent.
Lower day-to-day volatility means the fund is well-suited to clients who may be more uncomfortable with sharp rises and falls.
The smoothing process means the Wesleyan With Profits Growth Fund has an FE fund info risk score of just 11, which is 87% lower than the FTSE 100**.
Over the past ten years, the With Profits Fund has seen a cumulative return of 82%*** (as at 31 Mar 2023) and our mutual status means that investors’ returns can also be boosted through a share of the society’s profits.
It is the first With Profits Fund to be available to IFAs via platform (Novia), so is widely accessible to advisers at any time and can be easily incorporated into a diversified portfolio.
Past performance is not a reliable guide to future performance and the value of investments, and any income can go down as well as up. Investors may get back less than they invest.
Benefits beyond returns
The fund offers the benefits of daily pricing, daily trading and daily smoothing, so investors can get an instant snapshot of the value of their investment.
And we don’t forget whose money it is. When your clients want to access their investments, they can do so quickly – there is no need to wait for days or even weeks.
As a mutual, the impact of our activities on the climate and community matters just as much to Wesleyan as the impact they have on clients’ investments.
Your clients’ money is invested in assets that align with our Sustainable Investing Policy and its three key pillars; to reduce harm, have a positive impact on the environment and social development, while also driving change.
Taken together, all these factors mean that the Wesleyan With Profits Growth Fund is distinct in the market as a secure, smoothed investment that’s accessible, flexible and sustainable.
* Wesleyan 2022 annual results
** Wesleyan With Profits Growth Fund Series A FE Fund info risk score '27 Apr 2023'
*** Wesleyan With Profits Growth Pension Fund Series A Factsheet