In conversation with advisers: Tactics for decumulation

clock • 2 min read

Partner Insight: Flora Maudsley-Barton, managing director of Parsonage Financial and Kerry Nelson, managing director of Nexus Financial met in London recently to discuss decumulation.

In the final video of the series (see above), Flora Maudsley-Barton and Kerry Nelson talk to Julian Marr, Editor of Professional Adviser about how pension savers can withdraw adequate sums of money from their pension pot to fund their desired retirement lifestyle.

There are different ways you can fund your retirement living from buying an annuity, preferably inflation-linked, carrying out a minimum drawdown or the self-insurance approach (pick some advanced age which becomes your goal for your lifespan) and invest the pot with the appropriate combination of growth and risk.

Flora Maudsley-Barton says: "At Parsonage, we have three income portfolios populated with income units, we like natural dividend yield. When the client's need exceeds the dividend yield, if there is profit available, we will take that to prop it up, and we try to do that in advance."

Nelson talks about her approach to decumulation: "[My clients] understand that a little more risk sustains the capital value, and their income. So that is one of the driving forces before we take the income. For example, we can have a growth income portfolio and still feed an income from it depending on what tax wrapper it is in.

"If we are then looking for decumulating for income, I will always start by saying to the client, ‘this is the natural dividend yield from the FTSE All Share, this is the sensible expectations that you should have, and this is the level of income you should be drawing on a regular basis'.

"We at [Nexus] will help make that happen, whether it be on a half-yearly, quarterly basis. If you are just relying on a natural dividend, that is quite sporadic in its payment. So we try and provide some regularity to that income. So we don't always rely on a growth income portfolio per se, it really is down to how that client wants to decumulate, and in what tax wrapper."

 

 

Please visit Adviser Points of View, a site created by Incisive Media (publisher of Professional Adviser) in partnership with Architas.

More on Investment

Bikes, bias and the quest for outperformance

Bikes, bias and the quest for outperformance

I'm a disciple of the philosophy espoused by Lotus founder Colin Chapman: 'Add lightness'

Tobias Bucks
clock 14 July 2025 • 5 min read

Watch Professional Adviser's Working Lunch with Schroders - Beyond the Pulse: Essential insights for financial advisers in 2025

Catch up on the discussion

Professional Adviser
clock 10 July 2025 • 1 min read
Investors 'do not understand' implications of private markets investing

Investors 'do not understand' implications of private markets investing

House of Lords Financial Services Regulation Committee looked at the issues

Linus Uhlig
clock 09 July 2025 • 1 min read

In-depth

Why Gen Z still trusts financial advisers in the age of finfluencers

Why Gen Z still trusts financial advisers in the age of finfluencers

A digital generation with a human touch

Sahar Nazir
clock 23 June 2025 • 4 min read
QROPS class actions: What next for frustrated UK expats?

QROPS class actions: What next for frustrated UK expats?

Calls for reform across the board as insurers fight back in IoM

Isabel Baxter
clock 29 May 2025 • 7 min read
AI on trial: FCA's Live Testing opens new path for advisers

AI on trial: FCA's Live Testing opens new path for advisers

Offering regulated firms a controlled space to trial advanced technologies

Sahar Nazir
clock 21 May 2025 • 7 min read