Investors are having to work harder to maximise their income in retirement, Schroders' James Rainbow has stated.
The head of UK financial institutions for Schroders said: "The traditional routes are a well-trodden path but the markets have made it difficult for anyone seeking an income", he added.
Speaking to FTAdviser about the need for income post-pension freedoms, Mr Rainbow said there had not been "wholesale" changes in the way in which people both accumulate and decumulate their pensions.
He said "The biggest issue of course with any large regulatory change is dealing with the change itself and answering any client questions that may come as a result of something like this.
"We heard the stories in 2015 of insurance companies around the UK citing very significant increases in activity in their call centres immediately following the so-called pensions freedoms, and advisers faced a similar situation.
"But since then, what has been surprising, is that people have done relatively little. We have not seen a mad and wholesale rush to the local Lamborghini dealer.
"It is not a great deal of surprise to see cashing in of small pots, while large pots have been managed in largely the same way as they were before (pension freedoms).
There has not been a wholesale shift from what you would classify as the save or accumulate part of your life into a different portfolio, which is for the spend or decumulate part of your life.James Rainbow"Despite this being a seismic change in the pensions landscape, the changes have not been as large as perhaps had been anticipated."
Mr Rainbow agreed there had been "a degree" of people looking for income-generative multi-asset portfolios to bolster their retirement income potential, but noted that since the pension freedoms there has been more money going into drawdown products.
"That said", he commented: "If you look at what is being held in those drawdown contracts, there has not been a wholesale shift from what you would classify as the save or accumulate part of your life into a different portfolio, which is for the spend or decumulate part of your life."
While people are still dealing with the pension freedom changes, they are running with similar portfolios and typically drawing on the income from existing products, albeit within a drawdown contract, Mr Rainbow explained.
Speaking to FTAdviser last year, he said: "The traditional route into a low-risk, income-generating assets has typically been in the bond market and we know the situation there.
"People are having to get more imaginative with their sources of income and we have seen a lot of flow into equities that generate income in the UK and abroad, or into commercial property, but investors are having to work harder to get that level of income given the market environment."
simoney.kyriakou@ft.com
