The issue a few years ago, Bolton explained, was that LV’s old endowment policies were maturing and the mutual was not selling enough with-profit funds to replace those.
In April 2021, LV launched its latest version of smooth managed funds. While the mutual had been managing these types of funds since 2012, it was this latest fund which helped it restart growth.
“Now with-profit funds are growing again, so they’re a better long-term investment,” Bolton explained.
Back in 2020, LV had projected a further 60 per cent fall in member numbers over the next 10 years due to slow growth.
The smoothed funds range, which is one of LV’s with-profit funds, doubled its inflows last year and currently offers levels of risk rated at 3, 4 and 5.
Like Prudential’s PruFund, LV’s smoothed funds range is designed to ride out volatility - making it particularly popular during a global pandemic.
“We see ourselves as a competitor of PruFund,” said Bolton. “We’re seeing an increasing view taken by advisers to call it [smoothed funds] an investment category.”
This year, LV has plans to launch an extra cautious version of the fund risk rated 2, and an impact growth version risk rated 6 with a greater focus on ESG.
It also intends to include a range of modelled portfolios through its LV-branded, Embark-linked service built around these smoothed funds, and focussed on the transition to retirement and drawdown.
Since announcing the Embark deal, Bolton said LV has received a number of enquiries from other platforms - some proprietary and some integrated into other offerings - asking to discuss distribution opportunities.
“The answer is yes. The technology and IT development our end which enables us to partner with Embark will work with others. So watch this space.”
ruby.hinchliffe@ft.com
