Investors are accustomed to assessing risk, estimating the likelihood of potential outcomes and their impacts. But the coronavirus is a black swan, unpredictable and with an eventual outcome shrouded in uncertainty. I discussed this uncertainty during my recent Bloomberg appearance.
In Part III of this series we discuss Centralised Retirement Propositions (CRPs). We have seen a number of financial planners post-pension freedom rebadge their existing Centralised Investment Propositions (CIPs), which have been designed for accumulation, into CRPs. As volatility increases, concerns are growing that sequencing risk (sometimes called “pound-cost ravaging”) could have a devastating impact on their client’s investments. But what can advisers do to help mitigate this and design more decumulation-focused portfolios?