The technology available to support the range of retirement products on the market is not up to scratch, according to a panel of experts.
Speaking at FT Adviser’s retirement strategy event on Tuesday (April 30), Greg Davies, head of behavioural finance at Oxford Risk said the technology to support advisers working on retirement income has been “sorely lacking”.
He said: “There are a lot of products out there but the problem you have is in the technology to support these products.
“Financial circumstances are changing as you move from accumulation to decumulation.
“There are tools to measure risk capacity and apply it to a client’s balance sheet over time but it is an area the industry has been sorely lacking up until now.”
He added, with renewed focus on vulnerability from the Financial Conduct Authority, profiling tools should be used by advisers.
Kavi Myladoor, retail retirement income director at Just Group, agreed that technology needs to keep up with the difference between a client’s approach to money before and leading up to retirement.
She said there is technology in the industry that does not weigh income and growth information alongside other factors.
“The whole concept of sustainable income is so personal to every individual,” Myladoor said.
“Every person’s sustainable income is different based on their health and how long they will live.”
Myladoor added when it comes to assets, the industry is fragmented between property and pensions which could be a problem going forward.
Euan Munro, CEO of Newton Investment Management said platforms can do more to make retirement income clearer.
He said: “Clients have wildly unreasonable expectations about what kind of pension they are going to get.
“You need to get that conversation in early and stop it being a cliff edge.
“Platforms could do a lot to help. When you're looking at your portfolio on most platforms it isn’t obvious what your income from underlying assets is.”
William Marshall, chief investment officer at Hymans Robertson Investment Services, agreed the move from accumulation to decumulation should not be seen as a cliff edge, but rather as a long term plan.
He added: “Speaking to advisers, investments are not the top priority, it is more about what clients want to achieve.
“In terms of decumulation we talk about it as if it is a cliff edge, but it should be a long-term plan about what you are working towards and what level of income is possible.”
tara.o'connor@ft.com
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