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  • Stuart Fowler

Is anyone managing the retirement gamble?


Wednesday 8th October 2008 The Chartered Financial Analyst Society, The Weaver Suite, 90 Basinghall Street, London, EC2V 5AY 6.15pm for 6.30 start

As an integrated financial planner and wealth manager, applying institutional techniques of ‘liability-driven investment’, we know that drawing down from capital is one of the most technically demanding tasks to manage, with significant risk (and consequences) of error. It involves the same issues of engineering integrity that have tripped up, for instance, occupational pension fund trustees, mortgage endowment policyholders and Equitable Life investors. And those errors were not even tested by difficult economic and capital-market conditions on a scale such as Japan faced for nearly 15 years and which the global economy plausibly now confronts.

For the client, the challenges present themselves as a stream of unavoidable choices about funding strategy, investment approach, investment risk, competing methods of taking pension income and conflicting personal preferences. If these feel like gambles, that is no bad thing. The risks can and should be managed deliberately, starting well before retirement and allowing for uncertainty of late-stage earnings and savings. The typical excuses for complacency are ‘too busy’ and ‘enough money’. They will not prevent regret and recrimination if outcomes are bad.

In this seminar, Stuart Fowler (No Monkey Business founder and author of the no-nonsense investment book from which we take our name) and Joseph Clark will together ensure you are clear and realistic about the retirement gamble and how to manage it:

  • Powerful insights into the essential principles of drawing down from capital (whether in a pension account or other forms) when subject to particular constraints, such as maintaining the purchasing power of income; sustaining the rate of draw through bad markets; control; trust law and pension law.

  • Using the insights to make it obvious how the three sources of uncertainty common to constrained drawdown goals, inflation risk, longevity risk and investment risk, should be managed.

  • Showing you what kind of technically robust solutions for planning and managing drawdown deal with the constraints and the risks, using case histories and simulations.

  • Comparisons with parallels in institutional management as well as with alternative private-client solutions, including annuities, ‘variable’ annuities (drawdown with guarantees) and typical off-the-shelf portfolio approaches. When retirement is viewed as a dynamic, multi-stage journey, some of these solutions have a place at different stages and some have no place at any stage.

Because these insights apply to all forms of draw (or distribution) from ‘total return’, whether defined as income or capital, this seminar is also relevant to trusts, settlements and any private wealth where balancing capital and income preferences ought to be explicit.

The constraints may be different but the principles are the same.This is an opportunity for you to meet a firm that is successfully challenging the banking, stockbroking, tied agencies and IFA businesses who currently work with professional people.

In the words of one retired partner of a Magic Circle law firm:

You feel you have them on your side to a greater extent than you have with any of the other wealth managers that I came across in my work for a leading City law firm, where I was responsible for vetting advisers for individual partners. They are free of the prejudices and conflicts of interest that seem to be prevalent among just about all financial advisers. They are also ready to challenge what they see as conventional or lazy thinking.

We work mostly with high-earners in law, management consulting, financial and other services. They and their families typically have accumulated financial assets in excess of £2m. They pay us fixed fees based on the scope of the services, not portfolio-based fees. This is a radical departure from industry norms that makes us uniquely impartial. Described by a 2006 FT article as ‘a voice in the wilderness as it runs counter to the interests of the financial services industry’, you can also read what our clients say about us on our website.

We hope to meet you at one of these seminars or by other arrangement. Places are limited so if you (and your spouse) would like to attend please respond quickly to Joseph Clark on 020 7736 2434 or joseph@nomonkeybusiness.co.uk.

You can also ask to be added to our emailing list for Insight, our quarterly bulletin, or request to be informed of our future seminars.

#assetallocation #drawdown #ldi #retirementplanning

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