Innovation and Protection: The Next Step in Retirement Investing

Mark Mack, Hilbert's Head of UK Distribution Retirement Solutions explains how the combination of protection, transparency and ETF innovation is reshaping retirement portfolios for a more flexible future.

THIS ARTICLE FIRST APPEARED IN MONEYFACTS INVESTMENTS, LIFE & PENSIONS MAGAZINE, NOVEMBER 2025 EDITION.

The investment industry has spent decades refining how it thinks about outcomes. Investors and managers alike have learned that success isn’t only about generating returns - it’s about defining risk, establishing guardrails and ensuring that portfolios behave in ways clients can understand and rely on. The shift toward outcome-oriented design has made investing more transparent, disciplined and aligned with real-world goals.

For those approaching or living in retirement, this lesson has particular resonance. Retirement investing demands a unique combination of objectives: the need to preserve capital, the desire to generate income, and the hope to participate—at least in part—in long-term market growth. Balancing those forces has always been the challenge.

Where traditional MPS portfolios fall short

Model Portfolio Services (MPS) have become a central part of modern wealth management. They offer efficiency, diversification and professional oversight, making them a practical solution for many investors. Yet their structure often reflects a design philosophy suited to the accumulation phase of life, not the decumulation and preservation years that define retirement.

In addition, most MPS portfolios remain fully exposed to market volatility, therefore they rely on broad diversification to manage risk, rather than incorporating explicit protection. For younger investors with long time horizons, this can be acceptable. But, for retirees drawing income, even moderate drawdowns can have lasting consequences.

Moreover, the traditional MPS framework has been slow to adopt some of the most valuable principles learned elsewhere in the investment world - particularly from outcome-based and structured approaches. These lessons include the importance of defining risk parameters upfront, creating clear expectations around potential losses, and establishing mechanisms that mitigate the impact of major market declines.

Without those features, most MPS solutions continue to rely on market recovery as their primary form of risk management. This approach often leaves retirement investors exposed to uncertainty, precisely when consistency and protection matter most.

Innovation and the influence of ETFs

The evolution of exchange-traded funds (ETFs) has created new possibilities for addressing this gap of explicit protection. ETFs have transformed the way portfolios are constructed - bringing lower costs, daily liquidity and remarkable transparency. They have also given portfolio designers the flexibility to combine exposures in increasingly precise ways.

By using ETFs as building blocks, it is now possible to design portfolios that integrate elements of protection or risk management directly into their structure. Daily pricing and straightforward mechanics make these solutions accessible to both advisers and their clients.

This stands in contrast to many traditional MPS models that often rely on a combination of complex multi-asset funds and de-correlating strategies to manage risk. While effective in theory, these layers can introduce opacity, additional costs and make it harder for investors to clearly understand where performance and protection are coming from.

The innovation lies not simply in the products themselves, but in how they can be assembled to produce outcomes that are both measurable and adaptable. For retirement investors, this convergence of liquidity, efficiency and protection represents an important step forward. It allows the portfolio to remain responsive to market conditions while maintaining the discipline of defined objectives.

From protection to preservation

In today’s market environment for retirees, the challenges of higher inflation, persistent volatility and longer life expectancy have made capital preservation more important than ever. Retirement portfolios must do more than deliver returns - they must sustain lifestyles, manage withdrawals and withstand shocks without derailing long-term plans.

In this context, the most valuable form of innovation may not be the pursuit of higher returns but the ability to preserve lifestyle. Protection - implemented intelligently and reviewed consistently - can help ensure that volatility does not erode confidence or compromise future income.

The latest generation of solutions seeks to combine protection mechanisms with daily accessibility, creating portfolios that feel both secure and flexible. This is where technology, quantitative design and institutional risk management intersect to produce genuinely new outcomes for investors.

The Hilbert Protect 90 approach

Hilbert Investment Solutions has developed Hilbert Protect 90 as part of this new wave of innovation. It is designed specifically for investors in or approaching retirement, who value security but still wish to remain engaged with market growth.

Protect 90 uses a basket of ETFs to generate market returns while alongside this the portfolio has a 90% capital protection, with the level of protection increasing as markets rise. This capital protection is present daily and is provided via an insurance-backed commitment from the Munich Re group.

Oversight is central to its design. The Hilbert Investment Team conducts a Quarterly Risk and Performance Review that ensures the protection mechanism is continuously evaluated and can grow with the value of the ETFs.

This approach reflects a broader philosophy: that protection should be active, not static. It should evolve alongside markets and investor needs, providing stability without constraining opportunity.

A more adaptive future for retirement investing

As the retirement landscape changes, so too must the tools used to navigate it. The traditional divide between safety and growth no longer needs to be absolute. Advances in portfolio construction, risk modelling and access to diversified building blocks make it possible to design solutions that are both protective and participatory.

Hilbert Protect 90 demonstrates how the lessons learned from outcome-oriented investing can be applied in a flexible context. By combining the efficiency of ETFs, the oversight of a dedicated investment team, and the security provided through partnership with a global reinsurer, it offers a model for how retirement portfolios can evolve - steady, transparent, and adaptive to change.

Retirement investing has always been about balance. The difference today is that investors no longer need to choose between protection and participation - they can have both with Hilbert Protect 90.

Please note that Hilbert Investment Solutions does not provide investment advice or make personal recommendations. The value of investments can go down as well as up. Capital is at risk.