Chet Velani

       Managing Director

Hi there,

Since our last update, the FCA has shared an incredible statistic in its Retirement Income Advice Thematic Review - a staggering 33% of reviewed retirement income advice was found unsuitable. Unsurprisingly, the review has highlighted several key areas that require immediate attention.

The FCA's report highlights a significant issue with many advisory firms, which currently lack an adequate process for retirement income advice. Many of these firms follow the same process they use during their clients’ accumulation phase. The 'Dear CEO' letter, a pivotal part of the review, has sounded a clear call to action. 

It was made clear that all adviser firms must respond promptly to the review's findings. One highlighted area is the necessity of improving risk profiling and income withdrawal determination, emphasising the immediate need for action.

For many firms, these findings add to the increased regulatory scrutiny from the FCA following the release of their Consumer Duty requirements in July 2023. However, a key point of helping clients avoid foreseeable harm remains. This urgency aligns with our belief in the importance of a comprehensive risk suitability process tailored specifically for decumulation. Such a process necessitates a distinct methodology from accumulation, alongside the implementation of realistic cashflow modelling techniques. 

At EV, we have been at the forefront of addressing these challenges for years. We have pioneered stochastic-first stress testing within our cashflow planning tools and incorporated dedicated income risk methodologies across our range of financial planning tools and risk rating services. We are uniquely positioned to support, advise, and guide you through the complexities of thematic reviews, ensuring you achieve success with confidence.

Here is a collection of recent insights from the EV team:

Mastering FCA Retirement Income Advice Thematic Review - cashflow modelling

Designed for financial advisers and paraplanners, this comprehensive guide navigates the review, highlighting the pivotal role of cashflow modelling techniques. It strongly emphasises using techniques and strategies that meet and exceed the FCA's expectations and industry benchmarks, empowering advisers to excel in retirement planning.

Take control of your retirement income journeys with insights, tools, and resources

Visit our new resource for deeper insights into the implications of the FCA’s Retirement Income Advice Thematic Review (TR24/1). Find out how this regulatory development will impact advisory firms, asset managers, and retirement income investment solution providers. Access a range of practical retirement income planning resources, including a free calculator for Asset Managers.

READ MORE >>

FCA’s report on retirement income advice a ‘wake-up call’ with potential for significant harm

Chet Velani shares his thoughts on the implications for providers and the crucial role adviser firms have to play in understanding their customers' retirement needs and using processes and solutions that match them.

READ MORE >>

A summary of what's new:

Start building funds that deliver the right income level

For a limited time, asset managers can gain free access to the EV Interactive Asset Allocator for Income calculator which takes an asset allocation and shows:

• Income at Risk – the underlying risk measure.
• Income Risk Rating – where the income at risk score places the allocation relative to other funds.
• Level of Income Efficiency – how much income can the allocation sustain relative to the best possible with the same risk score and a very extensive range of assets?

Did you know?

We offer a dedicated adviser portal where you can easily access our range of fund risk ratings in one place. Alongside 739 growth funds, we've increased our income funds to 89. This allows you to seamlessly match your retirement planning clients to suitable investment products, and meet your regulatory obligations. Our user-friendly fund finder provides a variety of useful fund information for your convenience.

FIND OUT MORE >>

In case you missed us or would like to see us in action:

We’ll be at Intelliflo Innovate 2024 on Tuesday 4th June

We’re all about the pick and mix. It's how we like our sweets and our software. Drop by our stand at Intelliflo Innovate 2024 on Tuesday 4th, June to learn more about EVPro, our complete end-to-end financial planning solution that lets advisers assess, build, stress-test, review and solve client plans. You can also learn about how you can pick and mix your tools. EVPro modules are available as integrations within Intelliflo Office.

Thank you for taking the time to read our content.

We hope that you found it interesting and enjoyable.

To be a part of future issues of EV Fintalk, please contact us via email to share your expertise or contribute to the conversation. We welcome your valuable insights and look forward to hearing from you soon.