We long ago overstepped the fatigue threshold regarding yawn-inducing mentions of “robust, repeatable…” I daren’t complete the sentence for fear of triggering your napping trip switch.
Freestyle planning, though, is a hazardous pursuit.
Six months ago, the world mourned the passing of Nelson Mandela. In India, to honour his life, memorial posters were erected featuring a large photo of Mandela alongside smaller photos of Mahatma Gandhi, Mother Teresa and Martin Luther King Jr. The poignant message read: “The farmer may sleep but the seeds he planted never will.” Beautifully fitting… except the photo was of Morgan Freeman, not Mandela.
On a more trivial (but no less amusing) level, unofficial England World Cup mugs have just gone on sale with the image of US president Barack Obama mistakenly used instead of defender Chris Smalling
As alluded to last week, the added complexities of retirement planning post-Budget represent a fantastic opportunity for the advice industry. Understanding all manner of inherent risks in the retirement planning life stage is for the client, and their adviser, an extremely tricky business; the retiree wants to have sufficient income to meet an uncertain amount of expenditures over an uncertain time period, which leaves a fair few blanks.
There is little doubt that smarter integration of better tools can help facilitate the delivery of optimised, client-friendly outcomes.
Longevity risk is the risk that advisers tell us is the most important in income withdrawal strategy – advisers we consulted rated longevity risk 4.4/5 on average in terms of its influence on retirement planning. But it is also the area least well supported by technology (IFAs only rate the quality of available support at 2.81/5). There are also glaring gaps in support provision of health risk and mortality risk (see table).
There is a stated need for better technological support in most of the major items of risk relevant to clients approaching or post-retirement. Given the apparent shortcomings, even in the more straightforward areas such as longevity, it begs the question of how advisers currently take into account these factors.
What we know for sure is that dynamic, multi-faceted risk assessment will grow in importance following the Budget changes, especially if far fewer people (as expected) take the certainty of a lifetime annuity.
Phil Wickenden is founder of So Here’s the Plan – firstname.lastname@example.org