We can see quite a big announcement from Aviva Investors today. They have revamped their three retirement income model portfolios to help people get more reliable income in retirement. These portfolios are built using Aviva’s funds and outside partners. These have three levels of risk, which are low, middle, and high.

We know that many retirees worry about outliving their savings. They face risks like living longer than expected or markets dipping when they start withdrawing. Aviva’s revamped offerings target those issues directly. They aim for regular income, typically through fund distributions, while keeping long‑term growth in mind.

We want to explore how this matters for retirees and advisers. Why did Aviva act now? What do the changes mean? And how might these portfolios stand out compared to others? Starting with this update, we’ll walk through the background, the improvements, and what they could mean for retirement income planning, all in an easy, conversational style.

Background on Aviva Investors

We know Aviva Investors is the asset management arm of Aviva plc. They handle multi-asset equity, fixed income, as well as private market funds. They serve clients globally, drawing on over 50 years of multi‑asset experience.

In 2022, their first model portfolio service was launched with SimplyBiz. It targeted advisers using the Risk Controlled Workflow system. The updated solutions now tap into Aviva’s institutional pension expertise.

What Are Retirement Income Model Portfolios?

Model portfolios are preset collections of investments. They are tailored for different risk profiles. These retirement income plans are meant to provide income distributions from funds on a periodic basis. That helps retirees manage income needs without worrying about market timing or reinvestment decisions.

Unlike typical funds, model portfolios provide clarity and guidance to advisers, helping them match clients to the right risk level and income goal.

Key Enhancements Announced

Here’s what’s new in the revamped portfolios:

• Three levels of danger: Portfolio I (the lowest), II (mid-level), and III (the highest).
• Strategic Asset Allocation: blends global equities, bonds, alternatives, and private market assets to generate steady distributions while supporting long-term growth.
• Income focus: These were created to provide intended regular income in the form of distributing funds.
• Wider platform access: available via Aviva Platform, and through adviser tools like SimplyBiz Risk Workflow and Defaqto Engage, with more risk profiling support coming.
• Built by Aviva Investors’ Multi‑asset team, they draw on over five decades of portfolio construction experience.

Drivers Behind the Enhancement

Why now? Here are the key factors:

• Retirement risks: retirees face longevity risk (living longer than expected) and sequencing risk (markets falling early in retirement). Aviva’s changes aim to mitigate both.
• Market conditions: With low interest rates and volatility, income‑focused multi‑asset strategies help deliver dependable payouts. Smaller allocations to private markets, which are expected to pay illiquidity premiums, are rising too.
• Regulatory and adviser demand: advisers want eaan sier, scalable model portfolios aligned with pension regulation (like the UK’s Pension Schemes Bill). The strategy by Aviva is in tandem with increased interest in risk-managed income products.

Benefits for Investors and Advisors

Here’s how retirees and advisers gain:

• Clear risk choices: Three risk levels let investors select what suits them.
• Regular income: Predictable distributions help manage budgeting.
• Diversification: Global assets, bonds, alternatives, and private assets spread risk.
• Adviser ready: Available on adviser platforms with risk profiling and workflows built in.
• Construction: Constructed using extensive knowledge of pensions and multi-asset by Aviva.

Competitive Landscape

How does Aviva stack up?

• Other providers like Vanguard and BlackRock offer model portfolios, too. Aviva’s key edge is that it leverages its retirement and pension heritage and ties with adviser networks like SimplyBiz and Defaqto.
• Aviva also combines alternative income sources (private markets) more actively than some competitors. Institutional investors now expect private markets to outperform public ones, and Aviva has positioned itself to meet that demand.

Expert Opinions and Industry Reactions

Smera Ashraf, Global Head of Wealth, UK at Aviva Investors, said:

We are happy to rely on both our experience and the ear of our clients in updating our Retirement Income MPS. This takes up the needs of the retail and IFA market in a complex way.

Aviva’s CEO, Amanda Blanc,  has also voiced caution on government mandates in pension investments, calling such mandates a “red line”, emphasizing the need to protect savers’ interests and fiduciary duty. Industry advisers have welcomed the changes. They say solutions that offer income alongside adviser tools fill a growing gap in the market.

Potential Challenges and Considerations

No solution is perfect. Here are possible issues:

• Market risk: E diversified portfolios can lose value in downturns. Investors should understand the possibility of capital loss if markets contract.
• Complexity: advisers must correctly match clients to risk level and guide withdrawals. The Friction between regular income and capital preservation needs clear planning.
• Regulation and mandates: Aviva itself warns against government-imposed investment rules that might compromise returns or fiduciary duties.

Conclusion

Aviva Investors has upgraded its Retirement Income Model Portfolios to better meet the needs of retirees and advisers. The solution combines regular income, diversified global allocation, private market exposure, and built‑in adviser tools.

We think this is a well‑timed move. It tackles longevity and sequencing risks, answers advisor demand, and draws on Aviva’s institutional strength. While other providers offer similar products, Aviva stands out for its pension heritage and adviser partnerships. For retirees seeking stable income and advisers looking for guided solutions, these portfolios offer a solid starting point. As demand grows, we expect more innovation in retirement income offerings. Aviva’s latest step is an important marker in that evolution.

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This content is for informational purposes only and not financial advice. Always conduct your research.