Greater than half of monetary advisers reckon the FCA’s thematic overview of retirement revenue recommendation ought to suggest a unique funding method for purchasers in decumulation in comparison with these in accumulation.
The FCA launched its thematic overview in January with the purpose of publish its findings in This autumn 2023.
The regulator stated the overview was designed to grasp extra about how monetary advisers present retirement revenue recommendation and to evaluate the standard of outcomes customers are getting.
In accordance with analysis from Copia Capital Administration, 52% of advisers consider the overview ought to suggest {that a} totally different funding method is required for purchasers in decumulation in comparison with these in accumulation.
Nonetheless simply over two-fifths – 42% – consider the choice will not be clear-cut, whereas solely 5% don’t assume a unique method ought to be really useful.
The Copia survey was performed amongst advisers who not too long ago took half in a webinar.
Tony Hicks, head of gross sales at Copia stated: “I believe it’s unlikely that the FCA’s thematic overview will say something aside from your decumulation technique ought to be purpose-built. We firmly consider that the dangers in accumulation and decumulation are totally different.”
He stated that accumulation is fairly easy: “we’re attempting to offer an actual return and beat inflation, throughout the shopper’s threat urge for food.”
In decumulation although, he stated “we have to think about longevity and sequencing threat and purchasers need certainty of consequence.”
Mr Hicks stated: “Over the previous 18 months, we’ve seen the normal method of the 60/40 bond/fairness portfolio essentially fail in decumulation because of the correlation of bonds and equities in falling markets.
“Individuals have gone into retirement and seen their portfolio fall by maybe 20%, which is de facto regarding as it should considerably alter their life-style in retirement.”
The survey of 84 advisers fashioned a part of a webinar on the brand new Copia Choose Retirement Revenue Plus (RI+) portfolios, with Tony Hicks and Kevin Blackwell, Copia portfolio supervisor, with Yannis Katsis, enterprise growth director, and Stuart Slegg, SLI proposition supervisor from Simply Group.
