Retirees in the drivers seat with investment choice.

Alliance approach provides financial planning practitioners support in building innovative retirement income solutions for specific individual investor objectives

Financial advisers are no longer content with the traditional benchmarking approach to investment returns and are instead seeking solutions that cater to the specific needs of investors – particularly retirees, according to Russell Investments and echoed by Matrix Planning Solutions.

The trend is reflective of nascent shift in investment objectives: investors want portfolios that are designed to achieve outcomes that are more closely aligned their goals, rather than simply trying to beat a common industry benchmark.

In a move designed to address this demand, Russell Investments has partnered with Matrix Planning Solutions, a leading independently owned financial planning network, to develop and launch the PartnerShip Funds – five actively managed portfolios designed to deliver different outcomes depending on the investor’s life stage and needs.

Since officially launching in December 2012, all five PartnerShip Funds are ahead of their annual objectives on a pro-rata basis. The PartnerShip Growth Fund has achieved the strongest performance, posting a return of 10.8% for the year to August 2013. This is well in excess of its official target objective – the Reserve Bank of Australia Cash Rate + 4.5%.

Russell Investment’s Managing Director Private Client Services, Siva Sivakumaran, attributes the funds’ success to the collaborative approach of the partnership which is reflected in the effective operation of the joint Investment Committee.

“The Investment Committee has been established to ensure open discussion between the two parties. It’s made up of representatives from both Russell and Matrix Planning Solutions who meet regularly to discuss market developments and quantitative research which is then made available to advisers,” Mr Sivakumaran said.

Matrix Planning Solutions’ Managing Director, Rick di Cristoforo, said the partnership has provided a platform for advisers to access quality investment information which is used to devise strategies that accommodate the life-stages and investment needs of individual retail investors.

“It reflects the commitment from both Russell and Matrix Planning Solutions to provide advisers with the most effective tools to maximise the likelihood their clients realise their investment goals,” he says.

In aligning with Russell Investments, Matrix Planning Solutions consulted heavily with its adviser network who indicated more tailored client solutions were needed in achieving business growth amid a sustained period of reform.

Other key performance figures for monthly returns for the year to 31 August include:

• PartnerShip Balanced Fund posted a net return of 7.69%, which is 3.72% in excess of its Reserve Bank of Australia Cash Rate plus 3% target (pro-rated)
• PartnerShip Debt Management Fund posted a net return of 7.67%, 4.26% above its target of 80% of the Australian Banks Average Variable Mortgage Rate (pro-rated).

Through the partnership arrangement, retail investors are able to benefit from Russell’s unique capabilities in its five core areas – capital markets insights, manager research, portfolio construction, indexes and portfolio implementation.

Mr Sivakumaran said as the investment landscape grows increasingly complex, there is a shift towards outcome-oriented investing which addresses the need for products focused on objectives understandable by the investor.

“Along with the global multi-asset surge, it becomes evident that Russell has a lot to offer through our experience in crafting adaptive portfolios that delivers the right outcomes for investors,” he said.

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