Advisers favour multi-asset strategies to meet retiring clients’ changing needs, with a large number of clients fearful that they will run out of money in retirement, according to Aegon’s latest Adviser Attitudes report.
The report, which looks at how investment advice is adapting to meet the changing behaviours and plans of retiring clients, found that 31% of advisers say clients are choosing to retire later than they had initially planned. Running out of money in retirement was said to be clients’ number one fear, according to 77% of advisers, followed by difficulty planning how much income they may need in retirement (63% of advisers).
To support clients, advisers said that 40% of their retiring clients’ pension assets are invested in multi-asset strategies, making it the most popular investment strategy. Equity growth was the second most popular strategy, accounting for 15% of retiring clients’ pension assets. This was followed by equity income and fixed income, both at 11% of retiring clients’ pension assets.
Despite a run of higher rates, annuities were reserved for just 10% of retired clients’ pension assets, the report showed.
Lorna Blythe, managing director, investment proposition, at Aegon, said: “Given the economic challenges of the past few years, more people taking the decision to earn for longer and retire later shouldn’t come as a huge surprise. However, it’s important that both clients and advisers recognise that stopping work at a later date, but living longer on average, doesn’t necessarily mean fewer years of retirement to fund and plan for.
“When it comes to building pension assets, the flexibility and risk-rated options afforded by multi-asset strategies could be incredibly valuable for a growing number of clients who are adopting new patterns of work and retirement. It’s understandable that advisers continue to make use of them in the best interests of their clients, despite annuities becoming more attractive during the recent economic challenges.”
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