Dynamic Planner is to launch the Dynamic Planner Risk Managed Decumulation (RMD) Service, enabling comparison of decumulation investment solutions.
The service will help advice firms manage sequencing risk and so guard against unwelcome surprises in future annual reviews, the company said.
Talking about the launch, Chris Jones, Dynamic Planner proposition director said: “We are all more than familiar with the drivers behind the need for decumulation services and products, but, to date, only a handful of solutions have been launched and these are yet to enjoy the market share they deserve.
“In a rising market their unit price performance has not compared well with existing accumulation solutions but such a comparison fails to consider the needs and outcome of a target market needing to encash units on a monthly basis.
“We hope that by identifying those solutions that manage monthly risk and categorising them together a more fair and accurate comparison can be more easily made by advisers.”
Jones added: “Advisers have been able to research solutions that distribute an income and advice on portfolios that enable the client to take their regular withdrawals from cash for years. However, to date it has not been easy to research solutions from which it would be suitable to take regular monthly withdrawals by encashing units.
“Our Risk Managed Decumulation Service is the answer. It is unique in its approach as it focuses on sequencing risk by controlling the size of monthly losses – instead of looking at annual volatility. When a client introduces additional risk, by encashing units monthly to pay for a fixed capital withdrawal, this is managed more closely so that the annual risk to capital remains the same. As a result, capital is more likely to last longer.”
The company said it would be providing further details over coming weeks.