Alternative Income Solutions in RetirementJanuary 2013

Andrew Savill

Professional Advisor use ONLY – Not for distribution to Retail Clients.Gilliat Financial Solutions is a trading name of Arbuthnot Latham & Co., Limited who are authorised and regulated by the Financial Services Authority No. 143336.

Gilliat Financial Solutions

• Part of the Arbuthnot Banking Group plc., whichcan trace its name back to 1833

• Authorised/regulated in the UK• Gilliat is a leading provider of Structured

Investment Solutions• Fully independent from but works in partnership

with leading Investment Banks• Global Business reach servicing the financial

advisory community• Award winning Research and Development• Directors have background in

trading, risk management and investment design

04/08/23 2Gilliat Financial Solutions is a trading name of Arbuthnot Latham & Co., Limited who are authorised and regulated by the Financial Services Authority No. 143336.

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The UK’s leading independent structured product provider

Ever more people approaching retirement are having to contend with:-

•Low savings rates•Low annuity rates•Inflation•Sovereign bonds at record highs•Longer life expectancy•Uncertain financial markets

Retirement – not what it used to be?

Interest Rates at ‘all time lows’

Source: Bloomberg 21 January 2013

Fixed Rate Bonds in the UK – Current offers…

A scan of the UK Market – w/c 21st January 2013 - best rates from the ‘big 5’ UK banks

•Barclays Bank – 2.15% for 18 months•RBS – 2.1% for 2 years•HSBC – 3% for 5 years (£100k +)•Santander – 2.5% for 18 months•Lloyds TSB – 2.25% for 3 yearsIn 2007 rates of 6% + were available

Source: Bank Websites 21 January 2013

Annuity Rates have also fallen around the world

In the UK and US especially, QE has driven down annuity rates which has pushed yields lower around the globe.

Source: ThisisMoney.com 21 January 2013

Where else does one look for income?

Bond Funds? • Very popular in Q3 and 4 2012 but has the ‘great

rotation’ started? Is the sector ‘overbought’?• Yields can be unpredictable and are presently low.• Higher yield bond funds possibly a better bet with

risk environment improving.

Equity Income Funds?• Yields and/or distributions still in the 3 to 5% range• Capital is not protected – market cap can rise and

fall.

Property?• Liquidity a concern, speculative developments?• Physical property can deliver good returns but is not

without risks – cyclical/tenants/maintenance/legal risk

What Gilliat were asked for in 2009:-

• A known level of predictable income• A covenant from a reputable financial institution• A very transparent level of market risk with a robust

capital protection feature • Daily liquidity in the event of clients requiring exit• Constantly available solution

Alternative Solution

Example Structured Note - Income Builder PLUS

Gilliat Income Builder Series•Has been provided by Morgan Stanley, RBS and Commerzbank since the series began in early 2010.•Produces Quarterly Income•Capital protected if FTSE100 is above 3500 points (currently 6200)•Rates (fixed for each deal) have been between 6% and 9.7% p.a.•6yr Investment Term

Gilliat Income Builder – Income

The FTSE100 Index since 1984

04/08/23 12Gilliat Financial Solutions is a trading name of Arbuthnot Latham & Co., Limited who are authorised and regulated by the Financial Services Authority No. 143336.

Perhaps an Israeli Market Solution too?

04/08/23 13Gilliat Financial Solutions is a trading name of Arbuthnot Latham & Co., Limited who are authorised and regulated by the Financial Services Authority No. 143336.

Source: Bloomberg 21 January 2013

Over the last 5 years the Israeli Stock Market has exhibited similar trends to the UK.

Perhaps an Israeli Market Solution too?

04/08/23 14Gilliat Financial Solutions is a trading name of Arbuthnot Latham & Co., Limited who are authorised and regulated by the Financial Services Authority No. 143336.

Harnesses the bond AND equity markets to produce a product that fills a gap in the market.

Has transparent risk / return characteristics and a robust capital protection feature.

Important Notes

This material is for professional financial advisers only and persons of any other description should not rely or act upon it. Any investment in Gilliat Financial Solutions products should be made only after the investor has read and understood the product Guide including the Terms & Conditions, and the Termsheet.

Issued by: Gilliat Financial Solutions a trading name of Arbuthnot Latham & Co., Limited. Arbuthnot Latham & Co., Limited is registered in England No. 819519. Registered office:Arbuthnot House, 20 Ropemaker Street, London EC2Y 9AR.

Gilliat Financial Solutions a trading name of Arbuthnot Latham & Co., Limited. who are authorised and regulated by the Financial Services Authority, 25 North Colonnade, Canary Wharf,London E14 5HS. Registered under the Financial Services Authority number 143336.

Gilliat Financial Solutions does not offer investment advice or make any recommendation regarding investments.

Returns from the structured products are at risk in the event of any of the institutions who provide securities for these products default on their financial obligations.

04/08/23 15Gilliat Financial Solutions is a trading name of Arbuthnot Latham & Co., Limited who are authorised and regulated by the Financial Services Authority No. 143336.

Andrew SavillBusiness Development DirectorGilliat Financial Solutions Arbuthnot House20 Ropemaker StreetLondon EC2Y 9AR

Office: +44(0)20 7012 2803Mobile: +44(0)7785 470 030Email: andrewsavill@gilliat.co.uk

Adrian NeaveManaging Director

Gilliat Financial Solutions Arbuthnot House

20 Ropemaker StreetLondon EC2Y 9AR

Office: +44(0)20 7012 2801Email: adrianneave@gilliat.co.uk