Decumulation Investing
Decumulation is crucial for retirees to ensure they have enough money to support themselves after they stop working, avoid running out of funds, and maintain their quality of life throughout retirement.
The FCA’s recent review of retirement income advice emphasised the need for advisers to adopt a distinct approach for clients in wealth decumulation versus accumulation. It outlined that a one-size-fits-all approach is not sufficient, particularly as clients nearing retirement often face sudden changes in their personal and financial circumstances.
This means portfolios must be carefully designed to meet the unique needs of clients across all stages of retirement, ensuring they offer the necessary characteristics for long-term stability and income.
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IBOSS Decumulation MPS
At IBOSS, we are uniquely positioned to support you, whether you’re just beginning your Centralised Retirement Proposition (CRP) journey or are well along the path. The IBOSS Decumulation MPS is specifically designed to tackle the challenges and risks of retirement investing. The range, exclusively available to financial advisers and planners, offers a seamless solution to complement your retirement income advice for clients transitioning from wealth accumulation to decumulation.
Extensive Experience
Since 2008, we have been constructing decumulation portfolios designed to help clients manage their income needs in retirement. Our approach has historically supported regular withdrawals, reduced volatility, and aimed to align with capacity-for-loss considerations, while also seeking to deliver attractive, sustainable yields.*
Effectively Covering Risk Outcomes
A standout feature of our decumulation range is the wide variety of risk-managed portfolios. With seven decumulation options covering a broad spectrum of volatility outcomes, clients can easily find a portfolio suitable for their capacity for loss and withdrawal needs.
A Philosophy Built for Retirement
The IBOSS investment philosophy, consistent across all our ranges, carefully monitors and manages the key risks associated with retirement income: sequencing, longevity, and inflation. Our focus on diversification across asset classes and geographies, along with broad fund utilisation, further safeguards against market fluctuations.
Support and Advice
We understand that every client’s retirement circumstances and expectations are unique. Whether your clients seek a natural yield, a defined income, or growth without the drawdowns of an accumulation portfolio, we have the expertise and solutions to support you in your discussions with clients.
*Investment values and generated income can fluctuate and are not guaranteed. Clients may get back less than they invested.
Our Aim
The defining aim of our decumulation investment strategy is to support regular withdrawals.
To be able to achieve this, we believe the three main investment characteristics necessary to mitigate the risks are…
Taking the sting out of market falls
In retirement, defending capital becomes crucial due to sequencing risk, as retirees lack the luxury of waiting for market valuations to rebound as they did during accumulation phases and need to sustain a reliable income stream. Prioritising capital preservation could help retirees mitigate the potential adverse effects of market volatility and assist with safeguarding their financial security over the long-term.*
Smoothing out investment returns
We strive to maintain steady valuations within our portfolios, though we can’t eliminate market ups and downs entirely. By smoothing out these fluctuations as much as possible, we aim to provide clients with the reassurance needed to fully savour their retirement.
Diversified source of income
While it’s not a necessity, a natural yield has the potential to provide a source of income in decumulation. However, it’s crucial to ensure that the portfolio doesn’t over-reach for yield, as this could negatively harm the first two factors.
Investing Elements
Low Volatility
Lower Drawdowns
Attractive Yield
Why IBOSS?
Included within the extensive support offered by the MPS, we can also provide white labelled quarterly updates to clients on your behalf. This keeps them informed of current economic and market conditions, as well as fund changes to their portfolios. As many advisers and planners who use the services of IBOSS have vouched for in our case studies, they often become an indispensable part of a client proposition. We believe this part of the service helps demonstrate great value in the adviser-client relationship and makes them feel part of their investment journey.
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If you have any questions or would like more information, please submit a request to be contacted and a member of our Business Development Team will be in touch.
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Navigating the Twists & Turns of Retirement Income
A recording of a webinar, presented by our Investment Manager Chris Rush, is now available to watch on-demand. Recorded in association with NextGen Planners, this session provides valuable insights into IBOSS’s distinctive approach to decumulation investing and is fully CPD accredited. To obtain your CPD certificate after viewing, please contact laura@ibossltd.co.uk.