Advisers using Dynamic Planner’s Risk Managed Decumulation Service (RMD) can now access the Garraway Decumulation Model Portfolio Service.
The portfolio is the first decumulation portfolio built specifically to meet Dynamic Planner’s RMD Standard. It has been created using Dynamic Planner’s leading risk-rated portfolio guidelines and assigned a risk rating of 5.
Chris Jones, Proposition Director, Dynamic Planner said: “We welcome Garraway to our Risk Managed Decumulation service, with their specialist capabilities in hedge and managed futures. Advisers and their clients will benefit hugely from being able to access the expertise and scale of an institutional manager via Dynamic Planner.
“Back in April 2020, we effectively launched our RMD service into the pandemic – a timely coincidence with the events of the past 18 months continuing to bring this area of advice to the fore. The system has prepared clients for shocks and falls in capital value such as this, and to date the model and Risk Profiled funds have performed within the parameters an investor was led to expect.”
Mark Harris, Garraway DFM’s CIO said: “Dynamic Planner is the market leading risk-based system in the planning and advice process. With our aim to create a decumulation portfolio that is truly fit for purpose for the whole advisory market, it made perfect sense to work with the Dynamic Planner team to build the portfolio from scratch rather than trying to use an existing solution designed to meet the needs of a different target market
“The result is a portfolio that uses uncorrelated funds, rather than complex derivatives, to better match retirement duration whilst achieving the joint requirements of capital preservation and minimising drawdown. Putting it another way, our back testing shows that an investor could have made fixed withdrawals totalling over £49,000 per annum from a £1 million in this portfolio over 5 years and still have £1 million left. Of course, past performance is not a reliable indicator of future performance.”
The Key Features of Dynamic Planner’s RMD Service:
- Focuses on monthly over annual risk.
- Allows fair comparison of fund performance and charges for decumulation solutions, by filtering on only suitable solutions first it avoids the temptation to use other solutions because of long-term unit price performance or lower chares.
- Reduces the impact of clients encashing units within their portfolio for less than they are worth.
- Works in tandem with Dynamic Planner cash flow empowering fund and solution selection to be based on what a client needs and when not just what the funds will pay.
- Same simple process as researching and recommending a Dynamic Planner risk profiled fund or risk target managed fund – costing advisers nothing extra in time, but adding all the value and reassurance they need that the client in decumulation has the best possible outcome.
- No uncomfortable shocks at a next annual review. The risk and return assumptions of the agreed solution will have performed as expected even when the client introduces sequence of returns risk.
- Peace of mind – for the adviser and the client in decumulation. They can have confidence – particularly during times of significant market volatility – that they are invested in the right solution at an agreed level of risk. A typical client in decumulation, most likely retirement, may not have any further opportunities to buy more units if their earning power, from their working life, is largely over.