In Focus: Retirement Income  

How a multi-index approach can help pension planning

  • To understand how index funds work together in a portfolio.
  • To be able to ascertain how multi-asset portfolios can combine into a lifetime strategy.
  • To explain to clients what is, and what is not, suitable for their long-term needs.
CPD
Approx.30min
How to use multi-asset index funds for retirement planning
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Pension planning has become increasingly complicated over the past few decades.

We have seen the demise of defined benefit schemes and the rise of defined contribution, where the scheme member bears all the investment risk themselves, as well as the responsibility for securing their optimal retirement outcomes.

As part of this, the need for implementing sensible, secure strategies both in the accumulation phase and the decumulation pathways has become more important.

What sort of investment strategies work best for long-term retirement provision? Are there any particular investment plans that can be put in place for the moderately risky investor who wants to maintain an income through their investments in retirement?

How can you maintain a well-diversified portfolio without diversifying too much, or too little; without incurring high costs and ending up with a complicated bundle of investments?

Multi-asset funds that combine a variety of indices can be beneficial for both accumulation and decumulation strategies.

While they will not be appropriate for every client, the following feature, by Mohneet Dhir, multi-asset specialist for Vanguard Europe, outlines how this style of investing - as detailed by the company's own Life Strategy range - can help long-term planning.

To read the full CPDable feature, click on the image above and read the special report.

Simoney Kyriakou is senior editor of FTAdviser

CPD
Approx.30min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. According to the author, what determines the overwhelming majority of its long-term performance?

  2. What does Dhir say is the rationale behind an increasing allocation to bonds?

  3. Dhir says the mix between equities and bonds gradually does what, over time?

  4. According to Dhir, a tactical asset allocation strategy does what?

  5. Which of the following is NOT one of the three things Dhir warns us that Tactical strategies can do?

  6. How can advisers add value for their clients in a risk-controlled way, says Dhir?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • To understand how index funds work together in a portfolio.
  • To be able to ascertain how multi-asset portfolios can combine into a lifetime strategy.
  • To explain to clients what is, and what is not, suitable for their long-term needs.

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