View more on these topics

Billy Burrows: Do not let status quo bias ruin plans for retirement

Billy BurrowsIt is quite the understatement to say that we are in uncertain times. At times like this, what advice do we give our clients?

It is all too easy to hide under the umbrella statement that “it will all turn out alright in the long run” but this is a disservice to our clients. We owe it to them to keep them up to date and informed about the effect of world events on their finances.

I find comfort in going back to basics because often the simplest things can make a big difference.

There are three basic things we can do to reassure clients: make sure their income requirements are delivered, check the investment strategy reflects their risk profile, and review their longer-term plans to make sure they are on track to deliver the desired outcomes.

There is a common theme to the above – if the pensions and investments are set up correctly, they should be able to sail safely through any storms that may arise.

In practice, this means managing the sequence of returns risk when income is being taken, making sure investments are well-diversified and undue risks are not being taken, and ensuring long-term plans are flexible enough to adapt to changing circumstances.

It is all well and good to argue that, despite the current volatility, financial markets will produce positive returns in the future and clients will have good outcomes.

But I wonder if this falls into the trap of status quo bias: a preference for the current state of affairs and a reluctance to accept the future may turn out very different from the past.

We are in troubled times but I do not see anybody coming up with suggestions about how to deal with it. In a few months’ time we may look back and say that today’s troubles were a storm in a teacup or we might see things going from bad to worse.

I do not know how things will turn out but I sense there might be more trouble ahead and this thought should encourage advisers and their clients to consider if retirement plans and solutions need changing.

William Burrows is retirement director at Better Retirement

Recommended

Quilter soft launches new platform with staff money

Six years from the beginning of its replatforming project, Quilter has soft launched its new platform today. Quilter, then-called Skandia, made the first steps into its replatforming project in 2013 with technology company IFDS. The contract between Quilter, which then became Old Mutual Wealth, and IFDS was scrapped in 2017 and FNZ was brought in […]

3

Which firms are winning the race on wealth management?

Traditional wealth managers have proved themselves to be scalable and profitable businesses despite the hype caused by robo-advice models, analysts say. Wealth managers have also been shown to be more robust than pure asset managers amid mounting pressure on fund performance and fees. While Hargreaves Lansdown and St James’s Place continue to make the headlines […]

Appeal-Court-High-Court-Building--700x450.jpg

State pension court showdown set for summer

A judicial review about changes to the state pension age for millions of women born in the 1950s will take place from 5 to 6 June. The Department for Work and Pensions has confirmed that last November’s decision by the High Court to grant permission for a judicial review will go ahead in the summer. […]

Steve-Webb-Speaking-2011-700x450.jpg
4

Steve Webb: Helping clients keep track of NI records

One of the happy by-products of the digitisation of state pension records is that by visiting the government’s “check your state pension” website, clients can also see their full, year-by-year National Insurance contributions record. But as an adviser, there is plenty you can do to help them avoid drawing the wrong conclusions from it. One […]

Retirement - thumbnail

A downhill stroll?

The Department for Work and Pensions (DWP) has recently published new research, which once again demonstrates how the prospect of retirement is changing for older workers.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com