Risk Managed Decumulation funds

Dynamic Planner enables you and your firm to quickly and fairly compare Risk Managed Decumulation funds, to find and reach the best solution and outcome for clients. It avoids unfair comparisons with other potential recommendations, which can appear more attractive because of lower charges.

Dynamic Planner Risk Managed Decumulation funds are more intensively managed by the asset manager and thus command higher fees. However, your clients in decumulation, drawing on their investments for a regular monthly income, will experience less frequent volatility spikes, which over time can damage the client and more quickly shrink the value of their portfolio. In short, volatility is micro-managed to smooth out monthly performance and mitigate risk.

Without [the RMD funds] and without Dynamic Planner, [that] research and investigation would be extremely difficult, time consuming and costly to carry out. We would have probably had to contract it out to third-party experts.

Simon DrakeBainlye Drake Wealth

Sequence of returns risk for clients

Many clients in decumulation will need a regular monthly income, beyond the interest or dividends paid from investments and will spend capital as a result. The activity of spending or selling fixed amounts each month creates additional risk when the value of their capital goes up and down – called sequence of returns risk.

The number of units or shares which need to be sold to provide a fixed withdrawal is naturally greater when their value is lower – and less when it is higher. When more units are sold, the remaining units and thus a client’s portfolio has to work much harder to compensate. The more frequently that happens, the faster their capital is depleted.

Manage risk on a monthly basis

Purple Risk Managed Decumulation badged funds, by design, best manage and mitigate against risk on a monthly basis. Combining Dynamic Planner’s Asset Risk Model with our new Monte Carlo engine, we can model the impact of monthly market volatility more closely and match it to the client withdrawing capital each month.

Dynamic Planner communicates with asset managers each month, as opposed to each quarter for a risk profiled fund, to analyse a solution’s underlying holdings and provide a proportionate level of scrutiny to help ensure that risk is being managed and mitigated appropriately.

  • New model focuses on monthly – not quarterly or annual – risk
  • Fairly compare fund performance and charges for decumulation solutions
  • Reduces risk of client encashing units for less than their average value
  • Same simple process as researching and recommending a Dynamic Planner risk profiled fund
  • Avoids uncomfortable shocks at the client’s next annual review
  • Peace of mind – for the adviser and the client in decumulation that they are invested in the right solution at an agreed level of risk

Our Risk Managed Decumulation providers

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