Zurich Retail Protection, part of the Switzerland-headquartered Zurich Insurance Group, aka has widened the range of its Income Model Portfolios as advisors get more demand for tax-efficient income solutions. 

The government’s squeeze to capital gains tax and other forces have prompted the wealth manager to act, it said in a statement yesterday. 

The managed income strategies were built on the foundations of a Balanced Income profile that has formed part of 7IM’s core model range since 2013.

The expanded proposition now spans six risk profiles – Cautious, Moderately Cautious, Balanced, Moderately Adventurous, Adventurous and Adventurous Plus. Each profile targets a natural yield of between 3 and 4.5 per cent. This is a significant uplift on more traditional core portfolios, while maintaining a strong emphasis on capital preservation and long-term income sustainability, the firm said.

The portfolios are actively managed, based on 7IM’s strategic asset allocation. 

“The changes to CGT thresholds and upcoming changes to the inheritance tax treatment of unspent pensions has changed how clients are thinking about income. As estates grow, many are gifting surplus income to beneficiaries in a tax-efficient way,” Ben Kumar, head of strategy – wealth, public policy and investment at 7IM, said. “This may actually end up being a positive for growth in the UK, with money being passed through the generations at an earlier stage and appearing in the 'spending’ economy far sooner.

“This trend is also evident in structures like family investment companies, where dividend income is often more efficient than capital growth. Overall, there is a clear shift towards income-led returns,” he said. 

Total costs on the portfolios range from 0.49 per cent to 0.62 per cent.