Dynamic Planner has credited seven fund managers for their low-risk decumulation strategies in volatile markets.
From this month, advisers using Dynamic Planner can search and filter risk managed decumulation funds for clients who are looking to access their pension pots for a regular income.
When this service launches on Friday (April 3), it will list 11 decumulation funds from seven managers, including Columbia Threadneedle, Church House Investments, J.P. Morgan Asset Management, LV, Royal London Asset Management and UBS which have been credited with Dynamic Planner’s Risk Managed Decumulation purple badge for their services.
These are the first group of funds to meet Dynamic Planner’s criteria for low-risk decumulation strategies which have proven to work as expected during the current period of market volatility and falls.
With coronavirus pausing the economy, how investments can be accessed for spending is increasingly important, according to Chris Jones, proposition director at Dynamic Planner.
He said: “An adviser can confidently use Dynamic Planner throughout a client’s life and through different economic cycles in a way that reflects his own approach and proposition.
“The system has prepared clients for large shocks and falls in capital value such as this and to date the model and risk profiled funds have performed within the parameters an investor was led to expect.
“This launch addresses the impact of continued monthly volatility on decumulating clients.”
Dynamic Planner's comparison service will allow advisers to manage sequencing risk, which is the danger that the timing of withdrawals from a retirement account will have a negative impact on the overall rate of return available to the saver.
According to Dynamic Planner, the service will assess funds on both short-term and long-term volatility.
It examines each individual decumulation fund in the market in line with how the client is planning to take their money in retirement. This way the adviser can see which funds work best.
Due to coronavirus, clients may need to spend some of their investments long before they had originally planned to make up some of their lost income, the firm warned.
Also, disappointment in investment values may tempt a client to encash investments, even if they still have cash reserves.
But if clients were to spend existing cash and withdraw only what they need or take regular withdrawals from a risk managed decumulation fund, then they could be better off in the long-term when markets return to value, it said.
Mr Jones said: “No doubt recent events will bring this area of advice to the fore and we are determined to support advisers with leading edge investment analysis and cashflow modelling tools.”
What do you think about the issues raised by this story? Email us on firstname.lastname@example.org to let us know.