A virtual retirement income planning service, Chancery Lane, has been launched for clients with pots of more than £250,000.
The service is focused on decumulation and aims to secure regular income for retirees which beats inflation.
Chancery Lane was established by Doug Brodie, founder of award-winning advisory company Master Adviser and William Todd the co-founder and IT architect of Nutmeg.
The service will use ‘dividend champion’ investment trusts listed on the London Stock Exchange to produce a consistent dividend stream while protecting the capital sum, the pair said.
They added two actuaries and a mathematical physicist form part of the research team – developing algorithms that identify reliable long-term income streams from the investment trust universe, using consecutive income streams going back 153 years.
The service said by using natural income, such as dividends, retirees ensure their money will never run out because the capital never needs to be spent. For example, the F&C trust has paid its shareholders an annual dividend without fail, every year since 1868.
Investment trust dividends and share prices are not correlated, it explained, whereas shares fell in line with the market in 2020, dividends paid reached a record high of £1.88bn, an increase of 4.2%, despite UK dividends collapsing 38%.3.
Brodie, founder and CEO of Chancery Lane, said: “Over the past twenty years, as DB schemes disappeared, we noticed all our clients sought either immediate or future income – isn’t that what a pension is for?
“Securing a regular, inflation-beating retirement income is way too expensive using gilts and fixed interest so we simply research natural income wherever it can be found. Being independent we don’t use our own funds, and investment trust reserves enable dividends to be paid whatever the health of the economy – as we saw in 2000, 2008 and 2020”.
Chancery Lane provides free-to-use tools online where visitors can model their own income using real investment data.
Annual account management fees for advisory clients is 0.833% per month, 1% per annum.
Director Bridget McIntyre added: “We really do understand the emotional and financial anxieties of retiring: losing the 40-year structure of Monday to Friday can be just as difficult to adjust to as losing the monthly paycheque. Chancery Lane has been formed by baby boomers, our team knows the worries of being 50, 60 and 70, and we want our service to allay those anxieties.
“We want to make it as hassle-free and easy as possible and our virtual approach will ensure that wherever you are, you are always just a Zoom away from a face-to-face conversation. We also understand the importance of empathy. We speak our clients’ language, and this is at the heart of everything we do.
“No one looks forward to a retirement worrying about the FTSE rising and falling every day: we look after the money so clients can look after their retirement.”
McIntyre, a highly experienced businesswoman who trained as an accountant and has held numerous senior positions across some of the UK’s largest blue-chip organisations including UK chief executive of RSA Insurance, senior roles at Aviva and non-executive director at Saga.
Other key team members include Todd who had numerous senior roles, including co-founder of Nutmeg, which was recently bought by JP Morgan Chase.
Actuary Kim Lerche-Thomsen is also on board. He previously worked at Prudential where he started and ran Prudential Annuities, was CEO of Scottish Amicable and founder CEO of Primetime Retirement.
Others include Ian Manning, an IT consultant who worked at the Swiss CERN large hadron collider experiment set up to search for the Higgs boson ‘God particle’.
And Steve Sharp, the former marketing executive director of Marks & Spencer, and a Fellow of the Chartered Institute of Marketing and a doctor and visiting professor of Glasgow Caledonian University.