Retirement Income 

How to help your clients in drawdown

  • To understand why drawdown became popular.
  • To be able to explain the pros and cons of drawdown.
  • To ascertain which clients might benefit from drawdown.
CPD
Approx.60min
How to help your clients in drawdown

Introduction

Pensions freedoms have presented UK savers with far more flexibility over how they take their pension pots at age 55.

But with increasing longevity, the uncertainty over how much the overburdened welfare state will be able to look after the elderly, particularly those needing long-term care, and the government making incremental changes to pensions taxation and the state pension age, people's workplace pension pots will need to last much longer than many expect.

So what sort of strategies should advisers help clients put in place now to make sure that drawdown works for them?

How can one invest to ensure the fund lasts for the length of retirement, if clients need it to, and how can advisers help mitigate risks such as market and sequencing risk?

Moreover, how can advisers address that perennial problem of suitability, given people's needs will change over the course of their lifetime?

This guide, which qualifies for an indicative 60 minutes' worth of CPD, will help give an overview of how drawdown developed, the pros and cons associated with choosing drawdown as an option, what sort of clients will benefit from drawdown, and how advisers can assess ongoing suitability.

Contributors to this guide: Fiona Tait, technical director for Intelligent Pensions; Rachel Smith, associate consultant for Mattioli Woods; Jeff Steedman, head of Sipp and Ssas business development for Xafinity; Claire Felgate, head of defined contribution investments at BlackRock; Vince Smith-Hughes, retirement expert at Prudential; Rose St Louis, pensions specialist at Zurich UK; Steven Cameron, pensions director at Aegon; The Pensions Advisory Service; Prudential; Scottish Widows.

Simoney Kyriakou is content plus editor for FTAdviser

In this guide

CPD
Approx.60min
  1. According to Ms Smith, what have the suggestions about people withdrawing their money to splurge on Lamborghinis proved to be?

  2. How does Mr Steedman describe flexi-access drawdown?

  3. Mr Cameron believes comparing the offerings of different providers is more complex for flexi-access drawdown. True or false?

  4. What does Mr McGowan warn could have a big impact on a client's ability to sustain income withdrawals in retirement?

  5. Which of the following is NOT cited by Ms Tait as a scenario where a client might use drawdown for inheritance planning?

  6. What is an essential part of an adviser's toolkit when it comes to regular reviews, in Ms Tait's opinion?

Nearly There…

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

You should now know…

  • To understand why drawdown became popular.
  • To be able to explain the pros and cons of drawdown.
  • To ascertain which clients might benefit from drawdown.

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