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Frequently asked questions
What is the Standard Life Smoothed Return Feeder Pension Fund?
When a client invests into the 'Standard Life Smoothed Return Pension Fund' their money is initially placed into the 'Standard Life Smoothed Return Feeder Pension Fund'. The investment amount will stay within the Feeder Fund for 10 working days before being automatically switched into the main fund, which happens 2 days later. This is a step that enables the fund manager to provide the smoothing mechanism for the Fund. The progress of a client's investment can be tracked using the transaction history page once an instruction has been submitted.
Does 'smoothing' apply to the Standard Life Smoothed Return Feeder Pension Fund?
The investment return in the Standard Life Smoothed Return Feeder Pension Fund is always equal to the Estimated Growth Rate (EGR), minus fund charges.
What fund should I search for in the Quote & Transact journey in order to add the fund to a client's holdings?
Please search for the 'Standard Life Smoothed Return Pension Fund'.
Can a client invest in the Standard Life Smoothed Return Pension Fund within a capped drawdown account?
No, the 'Standard Life Smoothed Return Pension Fund' (and the Standard Life Smoothed Return Feeder Pension Fund) is not available within a Capped Drawdown Account. However, it is available within a Flexi Access Drawdown Account.
What is the Estimated Growth Rate (EGR)?
The EGR is the annual percentage rate used, together with the fund charges, to calculate the increase to the unit prices at the end of each working day. Standard Life calculate the EGR based on long-term market growth expectations of the underlying assets. The EGR is reviewed on a quarterly basis. Historic and current rates can be found here.
Can a client purchase the 'Standard Life Smoothed Return Pension Fund' as part of a transfer in?
Yes, a transfer into a Fidelity Pension Savings Account and a transfer to an immediate Fidelity Flexi Access Drawdown is available.
Can a client purchase the 'Standard Life Smoothed Return Pension Fund' as part of a re-registration into the Fidelity Adviser Solutions platform?
No, this is not possible because the Smoothed Return Pension Fund is not available on any other platform.
Can a client sell while their investment is held within the Standard Life Smoothed Return Feeder Pension Fund?
No, a client is not able to sell from the feeder fund apart from in the following circumstances: cancellation rights exercised, transfers out, death of the client, deal corrections or serious ill-health benefits.
Am I able to produce an illustration for the Standard Life Smoothed Return Pension Fund?
Yes, you can generate an illustration for an investment into the Standard Life Smoothed Return Pension Fund. You can also produce an illustration for existing holdings, including top ups into the fund.
What pre-sales documents are available for clients?
The following client-facing documents are available for the Standard Life Smoothed Return Pension Fund: Illustration, Beginners guide to smoothing, Customer guide, Technical Guide incorporating Key Facts - What you need to know. They can be found here.
What is the minimum/maximum investment into the Smoothed Return Pension fund?
There is no formal minimum investment.
Within which SIPP accounts can a client hold the Smoothed Return Pension Fund?
The fund can be held within a Fidelity Pension Savings Account, a Fidelity Pension Drawdown Account and a Fidelity Junior Pension Savings Account.
Why are investments initially placed into the Standard Life Smoothed Return Feeder Pension Fund and not directly into the Smoothed Return Pension Fund?
This is a step that enables the fund manager to provide the smoothing mechanism for the fund.
Which transactions could I see on the Smoothed Return Pension Feeder Fund?
Buys as part of a lump sum, regular Savings Plan, cash transfer or switch in.
What supporting material will be available to advisers?
The following materials are available to advisers:
ADVISER FACING
- Adviser guide
- Target Market and Product Governance document
- Fund factsheet
CLIENT FACING
- Client guide
- Technical Guide incorporating Key Facts
- Guide to smoothing
- Fund factsheet
You can view the literature here.
How can I reconcile investment growth against the historic Estimated Growth Rate (EGR)?
Investment performance figures are shown on the client's account and historic EGRs are available here.
Why is the growth rate on the illustration different to the Estimated Growth Rate?
We have set growth rates for money market instruments (including cash), bond and equity funds which are recalculated at the start of each tax year. Each investment on the platform is aligned to one of these growth rates. The Standard Life Smoothed Return Pension Fund is a multi asset fund, which are aligned to bond growth rates. The assumed growth rate is a weighted rate and is indicative only and does not represent the real actual long-term return potential of each asset. The purpose of the illustration is to show the likely effect of cost and charges on the client's investment for year 1. The figures take account of inflation at an assumed rate of 2.00%, which has the effect of reducing the investment return. Inflation could be lower or higher than this.
What documentation will clients receive when they invest into the Standard Life Smoothed Return Pension Fund?
They will receive the same documentation they receive when investing in any other fund. Please note, Confirmation Of Transactions are being produced for the Standard Life Smoothed Return Pension Fund.
How many decimal places will a holding be shown to?
A holding will be shown to two decimal places.
Can I link a model to the account if a client holds the Standard Life Smoothed Return Pension Fund?
No you cannot link the smoothed fund to a model.
What happens to the holding if a client de-links from my adviser firm?
The client will be able to retain the holding and sell down the smoothed fund but will not be able to purchase more units. However if the client has an RSP, this can continue at the current rate but cannot be amended.
How will the fund be displayed on the client summary screen?
It will be shown as the Standard Life Smoothed Return Pension Fund and will be visible in the holding section along with any other investments the client holds.
Will the fund be visible within Fidelity's reporting tools?
The fund will be visible in B2B reports, Illustrations, Client Reports and Oneview Statement & Valuations. It will also be visible within the Portfolio X-Ray tool, although the underlying funds will not be shown. As the fund is an accumulation fund, it will not be visible in the Income Report.
Will the fund be available in back-office reports?
Yes, the fund will be shown within back-office reports.
How is the fund priced?
The value of the fund is smoothed and aims to increase at an Estimated Growth Rate (EGR) which reflects the longer-term growth expectations the fund manager has for the fund. If the unit price of the underlying fund drifts away from the smoothed fund unit price by more than a set amount, then the unit price of the smoothed fund will be adjusted to bring it closer to the underlying fund value. It is not an NAV fund.
If a client's holdings are already linked to a model portfolio, can they hold the Standard Life Smoothed Return Pension Fund within a separate account?
A client can only have one Pension Savings Account. However, they can open multiple Pension Drawdown Accounts so they could do this when they move into the decumulation phase.
How are changes to the Estimated Growth Rate and Unit Price Adjustments communicated?
You can access the changes here.
How does the pricing of the Standard Life Smoothed Return Pension Fund differ from that of other funds?
The fund is intended to grow while providing some protection against the ups and downs of investing. Unlike traditional investments, the fund undergoes a ‘smoothing’ process which aims to shelter it from some of the short-term ups and downs often seen in the stock market. It’s important to understand that the fund carries no guarantees and an investor may get back less than was paid in.
What is the underlying NAV of the fund?
The underlying NAV of the fund is not disclosed this is because of how this type of fund works. The unit price of the smoothed fund is based on the expected growth rate EGR rather than the NAV of the underlying assets supporting it. This approach differs from a traditional fund where unit prices are directly linked to the NAV of the assets of the fund which is due to the unique smoothing investment experience.
How is investment performance measured?
The fund has an Estimated Growth Rate (EGR) and it is anticipated that the fund will grow by this rate. The growth rate will be monitored regularly with adjustments made when needed. This rate is subject to regular and ad hoc adjustments.
How does the performance of the fund compare to other multi-asset investments?
Unlike traditional investments, the fund undergoes a ‘smoothing’ process which aims to shelter it from some of the short term ups and downs often seen in the stock market. It’s important to understand that the fund carries no guarantees and an investor may get back less than was paid in.
How frequently is the Estimated Growth Rate (EGR) reviewed?
Standard Life calculate the EGR based on long-term growth expectations of the underlying fund. A review of the EGR is carried out typically on a quarterly basis, but may undergo an additional ad-hoc review if required.
What situations could result in a Unit Price Adjustment?
If the underlying fund unit price rises to be above 110% of the unit price of the smoothed fund then we will make an adjustment. This adjustment increases the unit price of the smoothed fund to be 2.5% lower than the underlying fund’s unit price.
If the underlying fund unit price falls to be below 90% of the unit price of the smoothed fund then we will make an adjustment. This adjustment would decrease the unit price of the smoothed fund to be 2.5% higher than the underlying fund’s unit price.
We also carry out twice monthly monitoring of the unit prices of the Smoothed Fund and the Underlying Fund, which can also result in changes to the unit price of the Smoothed Fund. These twice monthly reviews take place on the 5th and 20th of the month.
If the review date is due to take place on a non-business day such as a bank holiday, we move the review to the next working day. This review is carried out after the daily monitoring review has taken place.
If the Underlying Fund unit price rises to be above 105% of the unit price of the Smoothed Fund then an adjustment will be made. This adjustment would increase the unit price of the smoothed Fund by halving the difference between the two unit prices.
If the Underlying Fund unit price falls to be below 95% of the unit price of the Smoothed Fund then an adjustment will be made. This adjustment would decrease the unit price of the smoothed Fund by halving the difference between the two unit prices.
Are there any transactions which can't be placed while an investment is held within the feeder fund?
Other than in specific circumstances (detailed below), once an investment has been made into the feeder fund a client cannot sell or switch this investment into another fund.
Exemptions:
- Regular income payments (i.e. where automated income transactions are set up and processed by the platform)
- Pension Commencement Lump Sum
- Lump sum death benefits
- Serious ill-health benefits
- Small pension pot payments (up to £10,000)
- The deduction of fund charges
- Facilitation of adviser charges
- Customers exercising their right to cancel their Fidelity Pension
- Customers subject to a Pension Sharing Order
Will any other transactions be subject to delay in the future?
Transfers out will be subject to the 10 working day delay in the future. We will notify you when these delays are going to become applicable.
Why are the costs for the Standard Life Smoothed Return Pension Fund higher than for other actively-managed multi-asset products?
The smoothing mechanism is the differentiating factor and this is reflected in the costs.
Can I take a fee from the Standard Life Smoothed Return Pension Fund?
Yes, all fees can be facilitated from the Standard Life Smoothed Return Pension Fund (but not from the feeder fund).
Can a client set up regular investments into the Standard Life Smoothed Return Pension Fund?
Yes, this is possible.
Can a switch into the Standard Life Smoothed Return Pension Fund be made and how does it work?
Yes, the switch process will be the same as for any other investment. The only difference is the money from the switch will go into the feeder fund before being moved into the Standard Life Smoothed Return Pension Fund 12 days later.
Can a client switch out of the Standard Life Smoothed Return Pension Fund into Exchange Traded Investments?
A switch out of the Standard Life Smoothed Return Feeder Pension Fund directly into 'Exchange-Traded' Investments is not possible. Money from the Standard Life Smoothed Return Feeder Pension Fund needs to be switched to Fidelity Pension Cash first and once this transaction has settled the client will then be able to buy Exchange Traded Investments.
What is the deal cut off time?
The deal cut off time is 10.00am.
Where can I find details of current and historic Estimated Growth Rates (EGRs) and Unit Price Adjustments (UPAs)?
Current and historic EGRs and UPAs will be published here.
Can smoothing within the Standard Life Smoothed Return Pension Fund be suspended?
Standard Life may suspend the smoothing process in the following circumstances:
- A change in law or regulation, or government directive that prevented us from providing smoothing
- Any circumstances outside of our reasonable control, as described in the section below
- An infrastructure failure preventing us from providing smoothing
- If the Smoothed Return Pension Fund is closed
In such an instance, the unit price would be reset to be the same as the unit price for the underlying fund. The price would then move in line with the Underlying Fund unit price for as long as the smoothing suspension remains in effect.
Where we have made the decision to suspend smoothing, we will review the decision on an ongoing basis. Once we are able to do so, we will reinstate the smoothing process as soon as it is reasonably practicable to do so.
If this happens you will be notified.
Why is there limited data available in the Oneview Portfolio X-Ray tool?
The Smoothed Return Pension Fund has only recently been launched and therefore performance data will not be available for the first six months.
What happens when a client switches or sells the Standard Life Smoothed Return Pension Fund?
When switching out of or selling to cash from the 'Standard Life Smoothed Return Pension Fund ', there will be a delay of up to 10 working days between the instruction and the actual transaction.
What is the 90 calendar-day rule?
Only one sell or switch instruction for the Standard Life Smoothed Return Pension Fund is allowed in any 90 calendar-day period. If an instruction to sell or switch from an account has been placed in the past 90 days, a further instruction cannot be placed until 90 days have passed since the submission of the initial instruction.
When selling to cash, is the sale carried out on a unit-based sell or a percentage-based sell?
Sell instructions for the Standard Life Smoothed Return Pension Fund are converted into percentage of units before the instruction is placed and are subject to changes in value over time. Please note, when submitting an instruction to sell from the Standard Life Smoothed Return Pension Fund, the actual instruction will be delayed for 10 working days. The actual sum received by your client may therefore differ from the instruction amount placed.
If my client is taking a regular income from the Standard Life Smoothed Return Pension Fund, will a 10 working day delay occur?
No, the 10 working day delay does not apply to regular income payments.
Can a client re-register out of the 'Standard Life Smoothed Return Pension Fund'?
No, the Smoothed Return Pension Fund is not available for re-registration out as it is not available on any other platform. The Smoothed Return Pension Fund will be sold and transferred as cash.
Can a client transfer out of the 'Standard Life Smoothed Return Pension Fund' as cash?
Yes, the proceeds will then move to cash and then can be transferred out from Fidelity to another provider. There will in future be a 10 working day delay on this transaction.
Why are some transactions delayed?
The fund manager requires this feature to be in place in order to be able to provide the smoothing mechanism for the Smoothed Return Pension Fund.
Which transactions are subject to a 10 working day delay?
Switches, sell to cash, ad-hoc taxable income and UFPLS.
Which transactions are not subject to a 10 working day delay?
There are a number of transactions where the 10 working day rule does not apply. These are:
- Regular income payments (i.e. where automated income transactions are set up and processed by the platform)
- Pension Commencement Lump Sums
- Lump sum death benefits
- Serious ill-health benefits
- Small pension pot payments (up to £10,000)
- Deduction of Fund charges
- Facilitation of adviser charges
- Customers exercising their right to cancel their Fidelity Pension
- Plus customers subject to a Pension Sharing Order
Why can a client only place one switch or sell out of an account within 90 calendar days?
The fund manager requires this feature to be in place in order to be able to provide the smoothing mechanism for the Smoothed Return Pension Fund.
Is there a 10 working day delay when a client wants PCLS?
There will be no delay where a Pension Commencement Lump Sum is taken.
Is there a 10 working day delay when a client wants to take taxable income (drawdown income)?
There is no delay for regular taxable income. However, there is a delay for ad-hoc taxable income.
Why do sell to cash or switch instructions for the Standard Life Smoothed Return Pension Fund have to be placed separately to other assets in the account?
This is in order to prevent other sells or switches from being delayed.