All this means that pension savers have done extremely well over the last decade – especially those who embraced risk assets. It also means that too many retirees consequently see no need to change the investment approach that served them so well while in accumulation.
Unfortunately, there’s no end of potential catalysts that could derail the current fortunes of global stock markets from President Trump’s trade war to Brexit or a host of other geopolitical issues that could suddenly come to the boil.
Any retiree who relies on their accumulation strategy to deliver on their changing income needs in retirement in the next few years is taking a huge risk. If markets change direction significantly in the next few years – which they surely must as this cycle matures – then ‘sequence of return risk’ could well cut the legs out from under their retirement.
According to our own research, some 25% of those aged 45 and over have no intention of changing from their accumulation strategy to one more suited to decumulation when they reach retirement. Meanwhile, only around a third of respondents even recognise that short-term market movements are important when it comes to the value of their pension pot. This is another obvious area where advisers can add real value.
Of course, the clock is ticking; there won’t be any prizes for those advisers who waited until markets had gone into reverse before they helped their clients to recalibrate from accumulation to decumulation.
 Source: ONS as at August 2018
 Source: Retirement Line annuity quotations
 Source: The Quilter Investors 2018 Investor Sentiment Survey
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