We invited attendees to join us online for a practical, product-agnostic look at how smoothed funds actually worked, hosted by first-time Assembly host Jawaad Tanwir alongside Edward Green from M&G.
This session explored the role of smoothed funds in retirement planning, focusing on the behavioural and practical challenges clients faced around retirement.
It examined why volatility and uncertainty could lead to poor decision making and how smoothing helped clients stay focused on long-term outcomes.
Attendees reviewed the main types of smoothed funds, including with-profits, future-expectation smoothing and backward-facing averaging, highlighting how each approach managed volatility and expectations.
The session concluded with a framework for assessing smoothed funds, looking beyond headline returns to consider costs, structure, governance and underlying investment design.
Learning outcomes
By the end of this session, you will be able to:
A. What is the primary purpose of smoothing in retirement portfolios?
- To maximise short-term returns
- To remove investment risk entirely
- To reduce emotional impact of volatility and support better decisions
- To outperform equity markets over time
B. Which behavioural bias is most strongly linked to poor decision-making around retirement?
- Anchoring
- Overconfidence
- Herd behaviour
- Loss aversion
C. Which smoothing approach is explicitly forward-looking and uses an Expected Growth Rate (EGR)?
- With-profits
- Backward-facing averaging
- Future-expectation smoothing
- Passive index smoothing
D. What is a key limitation of backward-facing averaging smoothed funds?
- A. Use of discretionary bonuses
- Exposure to Market Value Reductions
- No forward return expectation for forecasting
- Higher governance costs
E. Why are smoothed funds typically more expensive than conventional multi-asset funds?
- Higher adviser remuneration
- Guaranteed returns
- Daily dealing costs only
- Additional layers of governance, liquidity and smoothing management
A. What is the primary purpose of smoothing in retirement portfolios?
- To maximise short-term returns
- To remove investment risk entirely
- To reduce emotional impact of volatility and support better decisions
- To outperform equity markets over time
B. Which behavioural bias is most strongly linked to poor decision-making around retirement?
- Anchoring
- Overconfidence
- Herd behaviour
- Loss aversion
C. Which smoothing approach is explicitly forward-looking and uses an Expected Growth Rate (EGR)?
- With-profits
- Backward-facing averaging
- Future-expectation smoothing
- Passive index smoothing
D. What is a key limitation of backward-facing averaging smoothed funds?
- A. Use of discretionary bonuses
- Exposure to Market Value Reductions
- No forward return expectation for forecasting
- Higher governance costs
E. Why are smoothed funds typically more expensive than conventional multi-asset funds?
- Higher adviser remuneration
- Guaranteed returns
- Daily dealing costs only
- Additional layers of governance, liquidity and smoothing management
Before collecting your certificate, please take a moment to provide us feedback on this session, please email prudential.distribution.team@prudential.co.uk
Complete the form below and we’ll email your CPD confirmation to you. Please use the email address that you would usually use when contacting us.
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