Dunstan Thomas is launching a tool for advisers that makes probability-based calculations of likely income at maturity, given specific investment options chosen by pensions and investments policyholders.
These calculations are made using a number of stochastic models which will now be offered within Dunstan Thomas’ Imago Adviser Tools.
The new stochastics-based tool incorporates underlying stochastic models authored and maintained by stochastics specialist and actuarial firm Lane Clark & Peacock.
The firm says this sort of probability-based information will also serve as a very useful trigger for routine reviews with customers.
It says if the odds on achieving targets are slipping, as evidenced by these routine stochastics-based calculations, advisers will be able to use these figures as the starting point for new advice.
Chairman Christopher Read says: “Every pension saver has two key questions: how much should I save to have enough to live on when I retire; and how should I invest the money? Traditional illustrations can only address the first of these. Stochastics allows advisers to give clear advice based on calculation of both the risks and the potential rewards of a range of investment options.”