Tue, Jul 16, 2019
How much money can I take from my portfolio without running out? How long will my portfolio last in retirement? Given my asset allocation, how much would I need to sustain a given level of withdrawal in retirement. Do you frequently get these questions from your clients? We bet.
Tue, Jul 9, 2019
‘How does Timeline work with Voyant?’ This is a question we get asked time and time again. We know many planners use both software. We totally get why. Voyant is a powerful cashflow planning software used by financial planners. Timeline illustrates and creates a sustainable withdrawal strategy for clients.
Mon, Jun 24, 2019
American writer Mark Twain was reported to have accurately predicted his own death. He apparently based his prediction on the astronomical phenomenon that marked his birth, the appearance of Halley's Comet. A year before his death, Twain said: 'I came in with Halley's Comet in 1835. It is coming again next year, and I expect to go out with it. It will be the greatest disappointment of my life if I don't go out with Halley's Comet. The Almighty has said, no doubt: "Now here are these two unaccountable freaks; they came in together, they must go out together.'
There's a lot of confusion around assessing capacity for loss, particularly for clients drawing down their portfolio. Much of it stems from the fact that the Regulator doesn't really seem to know how it should be assessed. There appears to be two camps in this debacle. On one side, you have an ex-regulator, paraplanners and compliance consultants who seem to think that capacity for loss is the be-all and end-all. We’ll call them the ‘compliance camp’. On the other hand, you have financial planners at the coal face.
One of the great misconceptions about the Sustainable Withdrawal Rate (SWR) framework is how an adviser (and fund) fees affect withdrawals from a retirement portfolio. This analysis shows that 1%pa translates into around 6%-12% (UK) and 9%-13% (US) of the client's overall income and capital, depending on the scenario. A total fee of 2%pa wipes out around 13%-26% (UK) and 19%-28% (US) of the overall fund, depending on the scenario.
John and Jo Miggins have worked hard all their lives. They saved as much as they could and now they’re ready to retire. They've paid off their mortgage and their home is worth £260k. Between them, they have £300k in their pension pots. And that’s it!
Mon, Mar 25, 2019
The latest Credit Suisse Global Investment Yearbook (excerpt here) compiled by Professor Elroy Dimson and his colleagues Paul Marsh and Mike Stanton, is a treasure trove of information. It covers asset class return and inflation in 26 different markets over the 119 years between 1900 and 2018.