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Thesis publishes report on mitigating risks in decumulation

3 July 2018

Thesis Asset Management has launched a new decumulation report, designed to help financial advisers understand the different factors that need to be considered during retirement planning.

The paper, Decumulation – the usual suspects: Sequencing risk and other unhelpful side effects provides advisers with information on the current decumulation market, as well as factors to take into account when planning a client’s retirement and what the market response to the pension freedoms has been.

According to Thesis, while much of the debate around decumulation has centred on understanding the risks in managing retirement savings, there needs to be more discussion around how these risks can be mitigated. The asset management group believes much more needs to be done to manage an ever-growing number of clients relying on their investments to sustain them in retirement.

Lawrence Cook, director of marketing and business development, Thesis, said: “One of the most prominent financial questions now asked is: “Have I got enough money to live on in the lifestyle that I want?” In the past people relied on final salary pension schemes, but these are becoming a dying breed and the defined contribution market has been turbo charged by the pension freedoms in 2015.

“Not surprisingly, therefore, we have seen an increasing focus on the needs of clients in this situation. But while the risks and issues surrounding decumulation are well understood, there has been a distinct lack of innovation from the market to help guide clients through what is a challenging period in managing their money.”

Cook added that it has become “vitally important” that services are designed to help advisers and their clients plan their finances throughout retirement. Earlier this year, Thesis launched its Managed Income Service, a decumulation portfolio service targeting long-term income while mitigating the near-term risks.

The report can be downloaded at: https://www.thesisam.com/wp-content/uploads/2018/06/Decumulation-the-usual-suspects.pdf

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