Every sales pitch needs an effective “call to action” – one that makes the consumer shrug off procrastination and take a decision without delay. In marketing its Retirement Fund NFO, ICICI Prudential MF seems to have come up with what looks like a very effective one liner call to action to get investors to begin saving for retirement without further delay:

“Miss one year = work for one more year”.

The cost of procrastination, rather than being expressed in numbers, which many consumers may not readily relate to, is instead expressed in a refreshingly direct manner that everyone can relate to. It’s a one liner that distributors might find very useful – not just for this NFO, but whenever they find clients procrastinating on their retirement savings plans.

Mrinal Singh takes us through the contours on the new Retirement Fund from ICICI Prudential AMC and the sales tools available to distributors to sell this product effectively.

Click here to download fund presentation of ICICI Prudential Retirement Fund

WF: Why should an investor consider mutual fund route for one’s retirement needs over other traditional options available in the market?

Mrinal: We believe mutual funds provide an optimal platform for meeting one’s long term financial needs. Given below is a comparative analysis of how retirement funds are stacked against other traditional products.

*(SWP) Systematic Withdrawal Plan facility shall be available at the option of the investor, the facility shall be available post completion of lock-in period

WF: Is there a plan to offer some level of term insurance with SIPs in this scheme? In what ways are you planning to make this a compelling choice for retirement savings for investors?

Mrinal: To begin with there are five compelling reasons for investing into ICICI Prudential Retirement Fund which are as follows:

The other point being that ICICI Prudential Retirement Fund comes with the option of SIP Plus. The SIP Plus facility is an optional add-on feature which allows a unit holder to add an insurance cover provided by ICICI Prudential Insurance Company Ltd while initiating a Systematic Investment Plan (SIP) with the Scheme. The Life Insurance cover will be available to all applicants aged above 18 years and not more than 51 years, at the time of the first investment.

The other point being that ICICI Prudential Retirement Fund come The insurance cover would be as follows:
Year 1: 10 times the monthly SIP Plus installment
Year 2: 50 times the monthly SIP Plus installment
Year 3 onwards: 100 times the monthly SIP Plus installment
All the above-mentioned limits are subject to maximum cover of Rs.50 lakhs per investor across all schemes/plans/folios.

Disclaimer: This is just for information purpose and should not in any way be construed as any kind of promotion or endorsement of any insurance product by ICICI Prudential Asset Management Company Limited. Insurance Cover is provided under Group Term Insurance Plan by ICICI Prudential Life Insurance Company Ltd. Please read the Group Scheme Rules for more details on the terms and conditions.

WF: Your presentation has a hard-hitting one liner: “Miss one year = work for one more year”. Do you have a calculator or similar tool which distributors can use in their conversations with clients to actually demonstrate this very important aspect of the need to start saving early for retirement?

Mrinal: Yes, we do have a retirement calculator (Retirement Corpus Planner) on our website (https://www.icicipruamc.com/retirement-mutual-fund-planner.aspx) under Tools and Planners segment. The same is available on our mobile application IPRUTOUCH as well, wherein both our investors and distributors can calculate the retirement corpus to be achieved.

WF: Is the 5 year lock in a mandatory feature for a retirement fund or have you chosen it as a means of encouraging genuinely long term horizons in this product?

Mrinal: The 5 year lock-in is mandatory in nature for a retirement fund. This is mainly with an aim to help cultivate long term investing among investors who otherwise may tend to tap into the retirement savings for other financial needs.

WF: What level of flexibility will an investor enjoy to switch between the four plans based on his changing circumstances and risk perception?

Mrinal: An investor with ICICI Prudential Retirement Fund can enjoy unlimited switches between plans without any exit loads. This feature is available even within the lock-in period of five years. This feature is to address the changing risk appetite and investment wherewithal that an individual may face across one’s investment journey. Additionally, one can avail active/auto switch facility available with the Scheme.

Auto Switch Facility is an optional facility available for investors, wherein the investors’ investment as specified by the investor will be automatically switched to any other specified investment plan of ICICI Prudential Retirement Fund under the same folio on a future date specified by the investor in the application form.

An Investment Plan for Every Investor

The investment option suitability under the scheme is based on investor risk appetite and requirements. Investors should consult financial advisors if in doubt of suitability of a plan. The above representation is for illustration purpose only.

WF: What is asset allocation followed in each of the four plans?

Mrinal: The asset allocation is distinct in each of the four plans which are as follows:

1) Pure Equity Plan

The investments here will be predominantly equity and equity related securities with an aims to generate long-term capital appreciation and income generation.
Equity & Equity related instruments - 80 - 100%
Debt & Money Market - 0 - 20%

2) Hybrid Aggressive Plan

The Hybrid Aggressive Plan aims to benefit from asset allocation. It will predominantly invest in equity and equity related securities to generate capital appreciation. It may also invest in Debt, Gold/Gold ETF/units of REITs & InvITs and such other asset classes for income generation / wealth creation.
Equity – 65-100%, Debt – 0-35% and Gold/Gold ETF – 0-35%

3) Hybrid Conservative Plan

The aim here is to generate regular income through investments predominantly in debt and money market instruments. The plan also seeks to generate long term capital appreciation from the portion of equity investments.
Debt & Money Market - 70-95%
Equity & Equity Related Instruments - 5-30%

4) Pure Debt Plan

In this plan, the aim is to generate income through investing in a range of debt and money market instruments of various duration while maintaining optimum balance of yield, safety and liquidity.
Debt & Money Market - 0-100%

Disclaimer: For each of the four plans the asset allocation and investment strategy will be as per SID of the scheme

WF: What tax benefits does this scheme qualify for at the time of investment and redemption? How do these tax benefits compare with other market-linked retirement investment products including retirement funds from other AMCs, NPS and unit linked insurance plans?

Mrinal: We are of the view that ELSS serves a better purpose from a tax saving point of view. For retirement planning this product emerges as a good solution. The tax laws prevalent for equity mutual funds and debt mutual funds will be applicable for this product as well, depending on the option (equity/debt) one chooses to invest with.

WF: In deciding the asset allocation in the two hybrid plans, will you be employing a model like you do for your BAF or is it going to be a static allocation?

Mrinal: The asset allocation for the two hybrid plans will be dynamic in nature. The inputs from the model followed for ICICI Prudential Balanced Advantage Fund will be considered for making the allocation.

WF: What equity strategy will you be employing in the equity components of these 4 plans? Which of your flagship products will the equity strategy most closely resemble?

Mrinal: Of the four plans available within the Scheme, only three have equity exposure, the remaining one being a pure debt plan. Within these three, for indicative purpose, Pure Equity Plan is likely to follow a multi-cap style of investing, Hybrid Aggressive Plan is likely to follow multi-asset model and Hybrid Conservative Plan is likely to be on the lines of regular savings.

Riskometer & Disclaimer

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

The information is only for distributors and Advisors of ICICI Prudential AMC and the same should not be circulated to investors/prospective investors. All data/information used in the preparation of this communication is specific to a time and may or may not be relevant in future post issuance of this communication. ICICI Prudential Asset Management Company Limited (the AMC) takes no responsibility of updating any data/information in this communication from time to time. The AMC (including its affiliates), ICICI Prudential Mutual Fund (the Fund), ICICI Prudential Trust Limited (the Trust) and any of its officers, directors, personnel and employees, shall not liable for any loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this communication in any manner.

Nothing contained in this communication shall be construed to be an investment advice or an assurance of the benefits of investing in the any of the Schemes of the Fund. Recipient alone shall be fully responsible for any decision taken on the basis of this document.

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