Ann: Launch of Magellan FuturePay, page-13

yes, the product really does look like a piece of garbage relative to all the hype and time/resources MFG say they've invested in it. Just had a skim of the PDS and basically investors are letting MFG pay away a portion of the investor's equity market returns into a reserve trust which invests in cash like low risk investments that FuturePay can then use to prop up income levels. Big drawbacks I see include:
a) if you decide to withdraw from FuturePay then you have no claim on the reserve funds that have been taken from your equity returns, so effectively this is a tax or exit fee that is being levied on investors in the name of income security...no thanks! This could end up being quite a significant tax on retirees who need to exit. This does makes the Funds under management sticky...so good for Magellan, not so good for investors.
b) if one is going to pay someone a reasonably high base fee (as well as cop an exit fee) to manage risk via asset allocation in this manner, why would one be silly enough to pay MFG to do so when they are only going to allocate between equities and cash? Wouldn't one be better off paying a lower fee to someone who has a broader asset allocation mandate and who has a more demonstrable track record in asset allocation amongst many different asset classes (there are plenty of such asset allocators out there)
c) MFG don't offer style diversification in equities either. As an investor, particularly a retiree, you probably want to have varying amounts of growth, value, and quality style equities in your equity portfolio (witness the recent rotation into value stocks and Magellan's underperformance...15% below the MSCI World over past 12mths)...you don't get this with FuturePay.

So all in all, I'd say this is a pretty big FAIL as a product.
However, this doesn't mean the skilled MFG sales team can't sell it...they've been selling overpriced equity funds for the past decade and gathering huge amounts of FUM with great success.