We are often asked this question - and we understand why. If you remember events like Black Monday (1987), the Dotcom Bubble (2000) and the Global Financial Crisis (2008), which saw large falls in global stock markets, it makes sense that you’d want to do your homework before you invest your hard-earned money.
Reassuringly, New Zealand’s regulatory landscape for financial service providers and investment products has changed a great deal since those unsettling stock market events. The 2008 financial crisis in particular prompted an enhanced regulatory framework for financial markets to safeguard investors and uphold market integrity.
The Financial Markets Authority (FMA) was established on 1 May 2011, with a more extensive mandate than its forerunner, the Securities Commission. The FMA is tasked with promoting and maintaining stable, fair, and trustworthy financial markets in New Zealand, fostering investor assurance, and bolstering the nation's economic prosperity.
This forms just one of three layers of security that Lifetime Retirement Income has built to keep your money safe and secure.
The Lifetime Retirement Income Fund is regulated by the FMA. In practice, this means we provide the following protections:
Custodial security: Your assets are kept entirely separate from Lifetime’s assets and held with an external custodian unrelated to Lifetime’s business. This means in the unlikely event of Lifetime encountering financial difficulties, your money is always safe and always yours.
Supervisor oversight: All financial firms that provide investment services are overseen by an external Supervisor, who looks out for your interests as a customer. The Supervisor’s job is to monitor what we do, to ensure we are fulfilling our regulatory responsibilities and are delivering to our customers what we said we would. This involves monthly supervisory reports and meetings. In addition, our supervisor reviews our quarterly Fund Updates and Annual Reports.
Disclosures: We must disclose all our offer and scheme documents online through the central Disclose Register, maintained by the Companies Office. You can search the Disclose Register here.
Annual Audits: Each year we engage an outside agency (PwC in our case) to complete an independent audit of the scheme in which your assets are held.
Safe by Design
Lifetime prioritises the security of customer funds from the word go – with our product design.
What design elements has Lifetime Retirement Income introduced to reinforce the long-term viability of the Lifetime Retirement Income Fund?
We do not set and forget – We take an active approach to managing your income. Unlike the set-and-forget mentality, your income plan with Lifetime is reviewed annually, spanning a period of twenty years or more. This is crucial to ensuring your money lasts as long as you do. Consider how much the world has changed in the last two decades; the iPhone didn’t even exist 20 years ago. Your life has probably evolved, too. Simply withdrawing a fixed 4% from your retirement savings every year might not reflect how much your lifestyle changes over time. At Lifetime, we conduct yearly check-ins to assess whether your current income level is sustainable given your specific circumstances. We communicate our findings and propose any adjustments that might be needed to ensure you have an income you can depend on for the long-term.
Risk management overlay – We pay a premium to help smooth out the ups and downs of your investment over the long-term. We do this because you are in a decumulation phase – i.e. spending mode. This means you’re using a combination of investment returns and your starting capital as income. In this stage, certainty and long-term sustainability is our investment objective rather than high growth.
Mortality Buffer – We add a minimum of a two-year mortality buffer to your income projection (in other words, we add at least a couple of extra years to your expected lifespan when we calculate your income, because people tend to live longer than they think!).
People, people, people
The Lifetime team is deeply committed to robust governance. Our Board comprises highly skilled and principled directors, supported by a robust succession plan. Our directors are responsible for making sure Lifetime adheres to all regulatory and compliance responsibilities. To achieve this, Lifetime’s Board meets with the Senior Leadership Team every month.
Lifetime Retirement Income is very much a team effort and our team's enthusiasm is unwavering. We are all dedicated to doing our best for our customers. Through a combination of regulatory compliance and meticulous product design, we instill confidence in our customers and financial peace of mind in their retirement. With Lifetime, they know they and their nest-egg are in the best hands.
Vanessa is Head of Communications at Lifetime Retirement Income. She’s an experienced investment writer, having spent more than a decade writing about financial markets in the global fund management industry.
Invest with Lifetime for a retirement income managed for living.