Model portfolio provider FE Investments has rolled out a range of decumulation portfolios for financial advisers.
The products aim to help advised clients in their investment journeys as they approach retirement.
The range is made up of two portfolios, the Initial Income Retirement Portfolio and the Long-Term Retirement Portfolio.
The former aims to protect investors from sequencing risk, where a large fall in the markets early in retirement would significantly devalue their holdings. The portfolio is designed with capital preservation as a “primary concern”, FE said, with a low correlation to equity markets.
The latter targets shortfall risk, where an investor runs out of money during retirement. In contrast to the other portfolio, the long-term product aims to grow capital in the short term through exposure to equity markets and then “subsequent long-term growth over an extended period”, the firm added.
Toyosi Lewis, retirement investment specialist at FE Investments, said: “Having the right decumulation strategy in place for clients has never been more important for financial advisers. Many clients are still relying on accumulation solutions to manage drawdown, which don’t mitigate against the different risks they face in retirement.
“Be it longevity or sequencing risk, advisers need to play an important role in helping their clients in decumulation to think differently about the risks they will face. Our decumulation portfolios are designed to mitigate these risks and help advisers satisfy their clients’ retirement objectives and tackle the twin challenge of income sustainability and sequencing risk.”
The range will be available initially on the Abrdn wrap, 7IM, AJ Bell, Aviva, Embark, Hubwise, Praemium, Quilter and Transact platforms.
