‘Significant number of retired clients are turning to income’

The director of multi-asset for Premier Asset Management said a “significant minority” of advisers were now converting to income funds to meet the changing needs of investors in retirement.

He said: “A key message of our portfolios are that they produce a high and reliable income stream for investors.

“We are absolutely convinced we are seeing a change in attitudes from those investors and their advisers, driven by changing demographics.

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“Where once they would be looking for funds which can help them accumulate wealth, now they are looking at how they can derive an ongoing income from their investment.

“People don’t accumulate funds in retirement; they spend it.”

Premier’s £38.82m Multi-Asset Monthly Income Fund is currently top of its peer group in the Investment Management Association’s Mixed Investment 20-60 per cent share category. It has delivered three-year returns of 33.88 per cent, with a stated aim of providing a high level of income.

Mr Hambidge added: “The fund pays out every month, which is ideal for those in retirement, and good for financial planning.

“To ensure as high an income as possible, we avoid emerging market debt, gold and commodities, concentrating on predominantly UK equity exposure, with some exposure to small companies.”

Adviser View

Carl Melvin, managing director of Glasgow-based Affluent Financial Planning, said: “Income is crucial to the overall returns that people can enjoy, especially when approaching or at retirement, while growth-orientated investments can be more risky. However the more income you seek from bonds, the higher the risk. In the environment we are in income is clearly important, but so is controlling risk.”