In conversation with IFA Magazine, Paul Fidell, Senior Business Development Manager at M&G Wealth, discussed the launch of the PruFund Range on the M&G Wealth Platform.
M&G Wealth has recently revealed that the PruFund Growth, PruFund Cautious and five risk managed PruFunds are now available as investment choices on the platform through its ISA, JISA and SIPP tax wrappers in addition to the traditional packaged retirement and investment products from Pru..
This development comes after years of requests from advisers and investors for PruFund to be made available in such a way. Since its launch in 2004, the benefits of having PruFund as an investment were always clear but some advisers have sought the benefits of PruFund in a platform model.
In this conversation, Fidell explains how and why he believes that this move will allow advisers not only to be more efficient with the management of their clients investments but also they’ll be able to benefit from having access to PruFund’s smoothed funds via a platform.
IFA Magazine: Can you remind readers what PruFund is and why is it such a flagship fund range?
Paul Fidell: “At its heart, PruFund is simply a multi-asset investment fund, however it has additional benefits too. It has been available since 2004 and originally came out of Prudential’s With-Profits fund. It was designed to be a more transparent and formulaic mechanism for the smoothing process. Ultimately, it’s the smoothing which really differentiates it from other available funds. As advisers will understand, the smoothing mechanism is designed to take out the impact of short-term market volatility and ease the discomfort that customers feel as markets fluctuate in value throughout their natural course. What the smoothing mechanism does is smooth out that journey for the investor. It’s proved incredibly popular since it was launched in 2004.
“It’s had its 18th birthday, and has over £58 billion invested (as at 31 December 2022) through its various forms and over 450,000 customers. Clients have used it for a whole variety of reasons, everything from a straightforward accumulation strategy – building up a pot of money for some point in the future – but it’s also proved incredibly popular in the decumulation space too.
“The introduction of Pension Freedoms back in 2015, really gave extra impetus to PruFund. We saw it really striking a chord with advisers and their clients. Why? Because of the attractive combination of a strong underlying multi-asset fund benefiting from the Treasury and Investment Office (T&IO) management and oversight. T&IO is the group’s team of investment specialists. With the unique smoothing mechanism sitting on top, providing that more comfortable journey for investors and helping to reduce sequencing of return risk, it continues to prove incredibly attractive for both advisers and clients alike.”
IFA Magazine: Why is PruFund being added to the M&G Wealth platform?
Paul Fidell: “It’s been a common request since 2004, when PruFund was originally launched. Advisers wanted access to PruFund through a wider variety of avenues. This development has proved a considerable challenge over the years but we’re now at a point where it’s available through a wide choice of both tax wrappers both off and on platform.
“The use of Platforms has gained such prominence now and forms the basis of many advisers’ business models. So the aim was to make PruFund available to as many people as possible through as many different mechanisms, tax wrappers and now on a platform as well.
“This latest development ties in with the growth strategy of both M&G as a business and that of advisers who are looking to embrace platform technology and encompass that for all of their planning requirements for their clients.”
IFA Magazine: How would you describe the benefits of PruFund being available on the M&G Wealth platform for advisers and their clients?
Paul Fidell: “Previously if you were looking to invest in PruFund, advisers would have to regard it as an ‘off-platform’ solution. Many are fine with this, but for some it meant that they were running it alongside their mainstream way of operating portfolio management for their client and it was less than optimal. For example, it doesn’t help when an adviser is working to build a range of different investments for their client, blending them under one solution in order to achieve a more optimised asset allocation strategy overall. Similarly, if advisers are working with a family, with a number of family members and looking to use that combined asset strength to gain cost efficiencies. Having an off-platform solution doesn’t always fit neatly with that.
“By making PruFund available on a platform it opens that door. It’s about unlocking things and giving advisers greater flexibility and choice to use either PruFund on its own or in conjunction with other investments, other tax wrappers, other forms of planning that they’re doing for their clients, underpinned by a platform.
“Overall, it makes the process much more efficient and effective for many advisers’ business models.
“As well as the adviser benefits, clients also gain from this new integrated platform approach too. Their investments can be located together in one place with everything invested through that one platform. With a simple click of a button, they can see their entire portfolio. Previously, clients may have had investments in different places and held in different ways. This solution makes things more simple, streamlined and accessible for advisers’ clients. Ultimately, it comes back to broadening that set of options and removing any obstacles from the path to investment.”
IFA Magazine: When is PruFund available on the M&G Wealth platform?
Paul Fidell: “The full PruFund range is available on the Platform now and advisers can access it through the Platform’s SIPP, ISA and JISA tax wrappers. This is the first time that the whole PruFund range has been available in this way on a platform and via those individual platform-based tax wrappers. This is all in addition to the pre-existing ways of accessing PruFund of course.”
In all, the improved access and availability through platform is an ‘all win, no lose’ situation. The M&G Wealth platform now benefits from having the addition of PruFund, with investment expertise built in and the benefits of smoothing. PruFund itself has been made more accessible, with advisers and investors having the option of platform capability to access it. This will likely prove to be a beneficial move for all involved and is a positive development for PruFund and the M&G Wealth platform too.