News - Press Release

April 2010

Dunstan Thomas Imago Front Office offers asset level projections in Version 4

Dunstan Thomas, the pensions & investment administration software provider, is unveiling a new version of its Imago Front Office (Version 4) today which provides illustrations based on projections of the performance characteristics of the policyholder’s actual mix of holdings in specific asset classes products. Dunstan Thomas has enhanced its flagship front office offering, Imago, to reflect the growing need for more real world, granular, asset-level projections for pensions or and other fund product wrappers.

The Financial Services Authority (FSA) declared on the need for more granular, asset-level projections in its ‘SIPP Operators - Report on the findings of a Thematic Review’ dated September 2009 and its associated fact sheet ‘SIPP Operators Thematic Review – Regulatory Responsibilities’ which summarised as follows: “It is important that you (SIPP operators) consider the nature of underlying assets and use projections that use realistic growth rates.”

The need for variable projection capability in illustrations has been further hastened by the downturn over the last two years which has illustrated the folly of using overly ambitious projection rates regardless of which mix of asset classes a policyholder’s money is held in, despite the huge disparities that operate between classes - disparities that often widen in times of uncertainty in the markets.

The problem has been further compounded by the increased popularity of SIPP-type pensions which give policyholders access to a much wider range of asset classes, each with specific characteristics and growth projections.

Dunstan Thomas Imago Front Office Version 4 goes beyond existing provision of calculating projections based on product tax wrapper to analyse and make projections based on asset class at an asset level type and percentage of holdings of each class. Version 4 offers maximum flexibility allowing users to create projections with the following variation of the facility to tailor projection rates as follows:
• Inherited - by standard tax wrapper or product wrapper growth rate level
• Explicit define each assets’ levels – using its own defined growth rate
• Offset – using inherited rates with specific offsets like the Retail Price Index (4.1%), Average Earnings Index (-0.4%) using an offset from the tax wrapper

In order to assist the member and adviser in understanding the cost implications between different products, Imago 4 uses a combination of Reduction in Yield (RIY) calculations (bearing in mind all charges associated with buying and managing the pension’s assets) will continue to use the mid-growth and individual asset reduction in yield calculations. level set at the product wrapper level as in Imago Version 3. Additionally, RIY calculations will also run against each fund/asset.

Statutory Money Purchase Illustrations produce projections of income in retirement based on a sliding scale of growth rates which currently stands at 5%, 7% and 9%, according to market outlook. But it is becoming increasing clear that these projections are not precise enough for policyholders today because they often hold funds in more diverse and sometimes more volatile asset classes.

Ian McKenna, director, the Finance & Technology Research Centre (F&TRC), confirmed:
“The FSA have raised some valid questions in their thematic work, but as is so often the case with their findings there is a need to be aware of unintended consequences. We see a real risk of consumer detriment if projections cannot be compared on a like for like basis; our discussions with advisers support this concern. Any tools which help facilitate the FSA requirements whilst enabling advisers to compare these issues objectively must be welcome.”

Chris Read, chairman, Dunstan Thomas Holdings, explains:
“Imago Version 4 is a very exciting development for us as it provides our clients with the ability to project growth at multiple levels and hence offering full flexibility while ensuring they are still able to do clear product cost comparisons. With limited guidance it is essential that SIPP providers and other pensions product providers have the flexibility to offer asset level projections as well as product level projections within clearly illustrating yield reductions to allow product comparisons. Our use of a more granular modelling approach, offsets and asset level projections through Imago Version 4 takes projections where the FSA wants tool providers to go by delivering accuracy relevant to wrapper and asset type.”

About Dunstan Thomas:

Dunstan Thomas is a pensions administration software and services provider offering a fully integrated range of components under the Imago brand. These components together provide the key back and front office administration tools needed by pension providers, third party administrators and financial advisers. Imago’s Front Office administration components include Illustrations, Reviews and stochastic models in Adviser Tools. Imago’s Back Office tools include Administration and Property.

Dunstan Thomas’ Imago is now establishing itself as a highly functional platform for servicing not only pensions products but also supporting Wrap platforms to help them generate increased efficiencies and automate calculations, illustrations and provide all relevant reporting capabilities.

Dunstan Thomas has been providing these solutions to leading names in the pensions and investments market for 20 years. It works with other leading names in the industry such as HSBC, Ascentric, Novia, Friends Provident, Hargreaves Lansdown, Xafinity and Capita.


For further information about Dunstan Thomas please contact:
Christopher Read, Chairman
Dunstan Thomas
Tel: 0239 282 2254
Email: cread@dthomas.co.uk

For Dunstan Thomas UK media enquiries please contact:
Miles Clayton
Agility PR
Tel: 01992 587439
Email: miles@agilitypr.co.uk