UK investment solution provider Elston Consulting has unveiled its Annuity Glidepath framework to assist DFMs and financial advisers offer a retirement income solution to their clients.
It blends a purpose-built retirement portfolio in drawdown with a ladder of later-life annuities to create a blended retirement income solution for clients, as part of a centralised retirement proposition.
The Annuity Glidepath will allow advisers to offer both drawdown and an annuity, but sequentially. This means retirement income comes from drawdown first, and then progressively from annuities from age 70-75 or so, depending on a client’s needs, withdrawal profile and capacity for loss.
Furthermore, rather than considering a single annuity purchase, the Annuity Glidepath means offering a “ladder” of annuities purchased in stages as clients age. This approach means capturing better later-life annuity rates, as well as reducing the interest rate timing risk associated with a single annuity purchase.
Henry Cobbe, head of research at Elston Consulting, said: “By combining a retirement portfolio for drawdown first, with an Annuity Glidepath for guaranteed income later, advisers can a deliver a more holistic approach to retirement income, that considers clients’ behavioural risks too. A longer drawdown means greater flexibility and potential for growth. A later annuity means greater peace of mind and fewer complex decisions.”
