Defaqto launches Income Drawdown workflow within Engage

20 January 2021

Defaqto has launched an Income Drawdown workflow within its financial planning software, Defaqto Engage, in what it called a ‘step-change’ in the right direction for clients in the decumulation phase.

The tool, which is free to existing Engage users, allows advisers to assess the impact that drawing a regular income has on a client’s accumulated wealth and calculate the sustainability of that income using different asset allocations.

The information and technology business said the new functionality will factor in the probability of volatile markets and consider the potential impact of sequencing, comparing three scenarios:

  • keeping investments in the current investment solution
  • moving investments to funds specifically assessed for decumulation
  • or buying an annuity.

Pan Andreas, head of insight and consulting (pictured), said: “This workflow provides a step-change in the right direction for advisers with clients in the decumulation phase. This year, in particular, has been challenging. But sequence risk always plays a role and advisers need tools that work seamlessly within their advice processes.

“The majority of investment workflows were originally designed to cater for the accumulation phase. As such, they most ignore the effect of sequencing risk when clients move to decumulation. They do little to highlight the appetite and capacity to bear income fluctuations when planning clients income in retirement.

“With our Income Drawdown workflow, advisers no longer have to create a fragmented report from several tools. Using an actuarial model, we’ve created an invaluable workflow that produces provider agnostic research specifically developed for decumulation.”

Professional Paraplanner