Seven Investment Management (7IM), founded in 2002 by Justin Urquhart Stewart and Tom Sheridan, is headquartered in London and has additional offices in Edinburgh. Total assets under management currently stand at £18.7bn and it employs more than 350 staff.
7IM provides investment services to professional wealth managers, planners, advisers and private investors for both accumulation and decumulation phases. 7IM services include discretionary investment management, multi-asset portfolios, an investment and open architecture trading platform and a fantastic app, 7IMagine, which brings client portfolios to life on their device of choice.
Pension Freedoms created a huge opportunity for financial advisers as the decumulation market moved rapidly from a position where more than 90% of pension assets were being moved into an annuity at retirement (therby being lost to further chargeable financial advice); to a situation in which advisers could participate in optimising clients' retirement income into and through decumulation - potentially increasing the length of client engagements by more than 20 years.
Unsurprisingly, many wealth managers realigned their businesses to focus on helping those approaching and in retirement to optimise their retirement incomes. For its part, 7IM chose to create its 7IM Self Invested Personal Pension (SIPP) to sit alongside its long-established General Investment Account (GIA) and Individual Savings Account (ISA) offerings.
7IM became an early adopter of the highly innovative Secure Lifetime Income (SLI) offering from Just. This enabled advisers to easily incorporate an element of guaranteed income for life alongside clients’ chosen investment strategies in order to produce a more sustainable, yet flexible, retirement income for all clients.
7IM then built and rolled out its Retirement Income Solution (RIS) to new clients, and more recently extending access to advisers of existing clients, to ensure that all 7IM clients’ needs are being planned for and their retirement incomes optimised both at onboarding and review stages.
Following the success of building and going live with the 7IM SIPP in early 2019, 7IM turned to its established technology partner Dunstan Thomas to ask it to build a new stochastics calculation engine, and a series of highly intuitive graphical tools designed to help advisers configure retirement income options and determine likelihood of being able to sustain a client’s desired retirement income expectation through the life of new plans.
The brief was to create interfaces for 7IM’s RIS which, supported by Dunstan Thomas’ new stochastics modelling engine, could help advisers to recommend the right mix of investments, model portfolios, mapping onto their clients’ risk profile and 7IM’s unique ‘bucketing’ approach to ensure investments are aligned with risk profile, while setting aside enough cash to see out periods of turbulent market conditions without having to crystallise short-term investment losses.
Once circumstances change, income needs can be adjusted and then calculations re-run to establish ‘how much money is likely to be left at the end of the plan’ based on favourable, neutral or unfavourable market condition scenarios offered via Dunstan Thomas’ stochastics modelling engine.
In addition, Dunstan Thomas created an option of being able to ‘Add other income’ part way through retirement. For example, many 7IM clients retire several years before their State Pension age. However, when they reach age 66, they might want to configure in a reduction of retirement income being taken out of their Income Drawdown plan to reflect the additional income that the State Pension is set to deliver. A further retirement income source could be added when a spouse reaches his or her State Pension age, for example, and the probability of being able to sustain retirement income through to term again recalculated.
On 13th December 2022, the ICX-built 7IM RIS portal went live for new clients and Phase II development began. Phase II opens the portal up to existing clients and offers them a range of capabilities associated with pension reviews. Various scenarios trigger reviews. For example, every 12 months, holders of 7IM’s RIS plan can be sent a review document automatically once their adviser has approved it. If still on track, according to all parameters pre-set in discussion with their adviser, then no further action is taken other than making an Annual Pension Benefit Statement available via the portal.
The portal can even automatically calculate buy and sell requirements to re-balance the portfolio at review; while portfolio adjustments themselves are still handled within 7IM’s existing investment management systems underpinned by Pershing.
The review period is also an opportunity to consider whether retirement income needs have remained static or moved up or down. Annual escalation levels may be adjusted to reflect increases of inflation for example. Alternatively, the client may decide to take a break from drawing income or utilise his/her cash pot if wanting to avoid crystallising losses in period of declining equity markets.
A range of scenarios from larger withdrawals, to topping up and taking a decumulation break, can all be explored, and the calculation engine will be put to work to assess ‘sustainability’ probability changes as a result of any adjustments.
Paul Pavlou, Proposition Analyst, 7IM:
“Dunstan Thomas’ stochastic modelling engine, together with the power of its Integro CX framework has made it possible to build retirement
income-taking scenarios. Given a mix of investments, model portfolios, and other parameters, advisers can quickly re-calculate the likelihood
of being able to maintain pre-set retirement income levels needed to assure a comfortable living standard in retirement for clients in planning
or review modes.
“This is what our customers, guided by their advisers, want to ensure. Their pensions and other investments must give them a strong probability
of achieving their retirement income goals. RIS has been delivering that for new clients for six months already and now, following completion of
Phase II, a comprehensive wrap around Annual Review can be rolled out to our existing pensions clients too.”
Dunstan Thomas has been instrumental in helping 7IM build a market leading platform for retirement. Key achievements include:
Paul Pavlou, Proposition Analyst, 7IM:
“Dunstan Thomas is exactly the sort of long term technology partner 7IM needs as we continue to build out our Retirement Income
Solution (RIS) offering for our advisers. They helped us to create the 7IM SIPP back in 2018/19 and continued developing
and implementing sophisticated user interface tools and technology-based solutions ever since. Their new stochastics-based
modelling engine, combined with highly intuitive and graphical user interfaces, all underpinned by Dunstan Thomas’ ICX portal
technology, are all working well to engage advisers and their clients alike.
“They are supporting advisers and users of RIS to have access to increasingly sophisticated retirement income options. Ultimately,
they help us to deliver a smoother, more efficient and consistently high quality service to our customers which, in turn, fosters
customer loyalty – meaning clients are more likely to keep their assets on our platform for longer and throughout
their retirement journeys.”
7IM Self Invested Personal Pension (SIPP) has now attracted over £1.5bn in assets under management (AUM). The 7IM SIPP, which launched just over three years ago, has proved to be popular with an increasing number of its advisory partners.
7IM has devoted considerable resources to offering advisory firms a high-quality digital user experience on its platform. It has also enabled Straight Through Processing (STP) of new 7IM SIPP applications and transfers-in, including accepting electronic applications signed using established digital signature offerings such as Adobe Sign and DocuSign. 7IM’s adoption and integration of Origo Options Transfers has also been instrumental in enabling rapid re-registration of assets to speed up Transfers-In.
All new SIPP applications are automatically passed straight through to Dunstan Thomas’ pensions administration solution Imago Administration for making new applications live within 24 hours wherever possible.
The pensions technology firm Dunstan Thomas helped 7IM build its SIPP which was launched in May 2018 and Dunstan Thomas now administers all 7IM SIPPs using its Imago Administration software and outsourced pensions administration service.
Dunstan Thomas Imago Administration also underpins the 7IM Tailored Drawdown offering for those in-retirement and looking to decumulate in a more flexible, potentially more tax efficient manner using all Pension Freedoms options including UFPLS, drawdown and ‘drip feeding’ tax free cash withdrawals in decumulation.
Dunstan Thomas Imago Illustrations also provide recently re-designed and simplified pre-sales illustrations and annual Statutory Money Purchase Illustrations (SMPIs). These illustrations have proved more client-friendly as they highlight valuation and charges information in a summary section on the front page and document length has been reduced to two pages.
Pension Freedoms opened up a huge opportunity for financial advisers as the decumulation market moved rapidly from a position where more than 90 per cent of pension assets were being moved into an annuity at retirement (thereby being lost to further chargeable financial advice); to a situation in which advisers could participate in optimising clients’ wealth right through retirement - potentially increasing the length of client engagements by more than 20 years.
Not surprisingly, many wealth managers realigned their businesses to focus on helping those approaching and in retirement to optimise their retirement incomes. For its part, 7IM chose to create the 7IM Self Invested Personal Pension (SIPP) to sit alongside its long-established General Investment Account (GIA) and Individual Savings Account (ISA) offerings – thereby rounding out its Retirement Income Service and ensuring that all in-retirement clients’ needs were being met.
Following a selection process in which Dunstan Thomas proved both its SIPP administrative capability and ‘can do’ attitude, 7IM elected to partner with Dunstan Thomas to build its SIPP product and the pensions administration system to underpin it.
7IM's Chief Operating Officer:
“We decided we did not want to build a pensions system ourselves - so we needed to find one that was ‘ready to go’.
We also had to consider how much of the associated pensions administration we wanted to run ourselves. It’s not a
great idea to employ 10 people to help you administer a new product when you are unsure of the level of business
that will flow from the new product.
“We wanted an external firm to both provide the pension system and administer it for us as an outsourced admin service.
We looked around the market and, having conducted a comparative evaluation, came to the view that Dunstan Thomas had the
best SIPP administration system and outsourced service offering, all underpinned by the market-leading Imago Administration system.”
Dunstan Thomas worked alongside a dedicated technical team within 7IM to collaboratively design all administrative processes around the new SIPP, ensuring tight integration with 7IM’s existing systems.
Dunstan Thomas also provided automatic cash matching to 7IM as part of its comprehensive suite of pensions admin services so that pension contributions received collectively into 7IM’s accounts via its GoCardless Direct Debit system, could be apportioned accurately to the correct individual pension accounts automatically, all via Imago Administration.
Dunstan Thomas helped 7IM to complete all SIPP design and administrative processes to the satisfaction of all parties ahead of 7IM securing regulatory permissions ahead of 7IM’ SIPP Rapid collaborative work by Dunstan Thomas’ team enabled 7IM to go live successfully with its new SIPP in May 2018.
Imago Administration now provides all administrative functionality to 7IM’s SIPP including: client search, onboarding, policy set up, transfers-in, contribution changes and associated reporting to the bank, FCA and HMRC. Imago Administration also provides workflow and work management capability in the background which helps deliver all this at a lower per unit cost than would otherwise be possible. Portfolio adjustments remain within existing 7IM investment management systems, underpinned by Pershings.
Once integration work has been concluded with already available Dunstan Thomas interfaces, client onboarding will become part of the automated suite of Straight Through Processes (STP) orchestrated by Imago Administration
The value of 7IM having its own SIPP looks clear when you analyse that more than 50 per cent of all 7IM-managed assets are already held within a pension wrapper. Clearly, it makes sense for a good portion of those assets to be held within a 7IM-owned pension wrapper rather than a number of other providers’ products. Dunstan Thomas offers 7IM’s preferred route to a fully automated STP service using its best-of-breed Imago SIPP administration tools and the option of full or partial outsourcing of pensions administration servicing.
Chief Operating Officer, 7IM, again:
“Dunstan Thomas is helping us to deliver a smoother, more efficient, and consistently high quality service to our customers which should also make it easier to command their loyalty – keeping their assets on our platform for longer - right through their retirement journeys now.”
7IM has already found now that it has its own SIPP, several wealth management groups are showing a more active interest in moving clients over to 7IM’s platform. The word is spreading that 7IM is not only great at managing investments on its platform but also they can put it in a relevant tax wrapper, thus catering for a much larger percentage of customers’ investment requirements, while seamlessly providing all operational and administrative requirements.