A recent IFA Magazine survey, conducted in partnership with Pru, explored readers’ feelings towards the PruFund Planet range of funds. The results were decidedly positive, with the majority of respondents supporting its sustainable, smoothed investment approach in today’s volatile market conditions.
PruFund Planet: A rising star
The vast majority of results to come from the data were extremely positive. Firstly, when survey respondents were asked if they were familiar with Prudential’s PruFund Planet range of funds, 68% voted “yes”. This suggests that the PruFund Planet range has had a good reception and has become well-established in the industry since its launch a year ago. However, 32% answered that they had not heard of the PruFund Planet range, which highlights an untapped investment opportunity for many advisers and their clients. In addition, although the majority (61%) said they were aware that the range is available on the M&G Wealth platform – 39% said they did not know where to access it. This again reveals that some professional advisers and paraplanners are missing out on Prudential’s PruFund Planet range and the potential for their clients to benefit from smoothed investment returns with a sustainability focus at the core.
In addition, almost half of respondents rated the fund range as “easy” or “very easy” to communicate to clients (compared to only 13% who said it was “difficult” and a very minimal figure of 3% who said it was “very difficult”). Therefore, advisers find this fund range client[1]friendly overall.
We were interested to uncover our audience’s perception of smoothed investment funds; 49% stated that they had a “positive” view of smoothed funds and a further 17% indicated that they had a “very positive” view of these funds.
It is clear from these results that our survey audience considers smoothed funds to be an appropriate investment option for their clients. By including the PruFund Planet range of funds in clients’ portfolios means that not only can they enjoy the benefits of the smoothing mechanism which minimizes short-term volatility but also ensures clients remain confident and invested in their investment strategy for the longer term.
Integration within a CRP
An impressive 85% of respondents noted that smoothed funds – including the PruFund Planet range of funds – have value when used as part of a centralised retirement proposition (CRP) (“extremely valuable” – 18%, “very valuable” – 28%, “somewhat valuable” – 39% [see Figure 1]).
The primary reason respondents gave for why these funds add value to CRPs, is that they provide an element of stability for the portfolio by reducing volatility. This is particularly useful for clients who are approaching retirement and cannot afford for their savings to be negatively impacted by market volatility. Many respondents answered that the PruFund Planet range is particularly valuable because of M&G’s household name and positive reputation, which gives clients an increased sense of security. Our survey audience also noted that smoothed funds are beneficial for increasing the diversification of CRPs, which is particularly necessary for today’s challenging market conditions. Furthermore, one respondent commented: “the fund has worked well during the recent market volatility; my PruFund clients are the happiest of all my clients”.
Supporting a range of client outcomes
A strong majority of respondents (79%) also agreed that smoothed funds support effective client outcomes within income drawdown. This is an extremely compelling response, with only 7% answering that they did not feel smoothed funds enhance such outcomes at all.
We also asked our survey audience to rank PruFund Planet’s past performance, compared to other multi-asset funds. Figure 2 shows that 50% rated the PruFund Planet funds as “positive” and 17% rated them as “very positive”. Therefore, the vast majority of respondents are happy with the range’s performance – proving that advisers and clients can make a difference to the planet without sacrificing returns.
Although some of our audience highlighted cost as a disadvantage of smoothed investment funds, the majority said they believed the PruFund rage of funds offered good value for money. The consensus was that the charges. were “fair”, and despite respondents commenting that these charges were slightly higher than that of other providers, they felt it was justified by the consistent outcomes. Nevertheless, multiple respondents expressed that the range was affordable and in line with their expectations – for example, one respondent said, “the costs compare well with similar solutions”, and another commented, “not expensive given the smooth returns”. The benefit of smoothing was highlighted as a key reason for higher costs but was again shown to be a small price to pay in such a challenging market – one respondent said: “they have performed when other funds have been impacted by economic conditions”. This positive feedback can be summed up in two words that we received from a respondent: “happy clients”.
Time to talk about T&IO
When asked if respondents were familiar with the Treasury & Investment Office (T&IO), who manage the underlying investments within the PruFund Planet range of funds, 59% answered “no”. Advisers and paraplanners perhaps need more information about the T&IO team – and how their extensive expertise in asset allocation and fund selection allows them to make the right calls and decisions on an active basis.
Perfect for “any investment plan”
Our survey audience also identified a range of client scenarios in which they might recommend the PruFund Planet range as a suitable investment solution. Unsurprisingly, the most frequently occurring answer was that the range is best suited to cautious clients (especially those with limited investment experience) who want predictable income and minimal volatility from their investment portfolio. Another popular answer was that respondents would suggest this range to clients who have expressed interest in ESG and are, in particular, looking for environmental investments with a smoothed proposition. Multiple respondents again noted that PruFund Planet is appropriate for clients approaching retirement and thinking about pension accumulation/ decumulation and income drawdown. One respondent commented that they would discuss the PruFund Planet range of funds “within any investment plan” – emphasizing the range’s versatility.
What more do respondents hope to see?
Finally, we also asked our survey audience what else they would like to see from Pru and the PruFund Planet range of funds. Our respondents provided a number of different suggestions, however, common responses included:
• Reduced annual management charges
• Availability on more platforms
• More granular detail on ESG credentials
Overall, it seems the majority of respondents are very satisfied with the PruFund Planet range. For those advisers and paraplanners who are considering using this range to help clients achieve their goals – there’s the added advantage that, by doing so, it benefits the planet too. Win-win!
About the survey
The survey, ‘Understanding Prudential’s PruFund Planet’ was carried out online and generated 88 total responses from IFA Magazine readers. It ran between 11th – 14th October 2022.
