Vanessa Barnes, chartered financial planner, Hannay Wealth
Retirement is no longer the clear-cut, black-and-white event it once was. Vanessa Barnes, a chartered financial planner at Hannay Wealth, notes that the absence of a "traditional" retirement necessitates more in-depth conversations with clients.
Client needs will vary on a case-by-case basis, but the fact is advisers need to be able to satisfy a growing list of requirements. In retirement, as well as day-to-day costs there may be aspirational purchases, lifestyle ambitions and long-term care needs to fund. Added into the mix the fact that retired individuals have a finite amount of capital to use, and this can pose a significant challenge.
"You can't find one miracle investment that will fulfil all objectives," adds Barnes. "There needs to be an array of tools in the kitbag of the financial planner that they can use in order to fund different requirements.
Against this backdrop, advisers are recognising the merits of a smoothed fund in building their clients' retirement plans. These strategies are designed to dampen out day-to-day volatility in markets, giving investors peace of mind and greater protection.
"Diversification is absolutely critical in retirement, so you know that somewhere in your portfolio there's something that's going to give you the income that you need on demand," adds Barnes. "You cannot say to the Gas Board I'm sorry I can't pay you right now, the market is down, can we wait till next month?"
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