Retirement Portfolio Planner (UK Edition)

Retirement Portfolio Planner (UK Edition)
The Retirement Portfolio Planner is a risk analysis and financial engine specifically designed for practitioners in the retirement income
market. Using our core stochastic modelling platform capability, it supports advisors in identifying optimised retirement income solutions,
aligned with the individual retiree’s income and capital needs, as well as their capacity for loss. The Retirement Portfolio Planner can be
configured in line with our client’s own retirement product offering and advice model.
The Challenge: Identifying Optimised Retirement Solutions and Demonstrating Suitability
Savers lose more money through bad decisions at retirement than at any other stage of the savings life-cycle. Traditional advice
propositions, often base investment recommendations on a client’s attitude to risk and associated target volatility range, or riskrated funds. This approach does not capture the risks facing retirement clients, where the objective is focused on achieving a stable
level of income as opposed to asset growth.
Recommendations based on these “accumulation” models will expose customers to unacceptable levels of risk. A different approach
is necessary to effectively demonstrate investment suitability to clients at retirement.
The Solution: Sophisticated Stochastic Modelling of Retirement Income
The Retirement Portfolio Planner is a modelling and analytics engine supporting the full range of retirement products and income
strategies. It allows advisors to capture a client’s retirement needs, identify optimised retirement solutions, and support effective
communication of the risks and benefits of different products and strategies. The Retirement Portfolio Planner provides a comprehensive
and objective basis to demonstrate suitability in a retirement context.
RETIREMENT PORTFOLIO PLANNER: POWERING THE NEXT GENERATION OF RETIREMENT PLANNING SOLUTIONS
Retirement Income Planning Solutions
Retirement Portfolio Analysis
Retirement solution options
Retirement
options
Income
sustainability
Detail
Risk
tolerance
Expected
death benefits
Guaranteed
value (£ pa)
Annuity
100%
Moderate
£0
£13,900
Drawdown Cautious
30%
Cautious
Drawdown Balanced
64%
£54,750
£0
Balanced
£82,200
£0
Drawdown Growth
79%
Moderate
£101,900
£0
Drawdown Adventurous
83%
Adventurous
£127,050
£0
Annuity & Drawdown Cautious
57%
Cautious
£43,375
£3,200
Cautious
£59,212
£2,500
Balanced
£65,705
£1,750
Annuity & Drawdown Cautious
Annuity & Drawdown Balanced
64%
63%
INVESTMENT TERM (AGE)
RISK TOLERANCE
75 years old
Moderate
Scatter chart
Income
comfort zone (£ pa)
INCOME TARGET
£5,000
MIN
£10,000
£15,000
MAX
Application Programming Interface (XML, API)
Retirement Portfolio Planner
Retirement Needs,
Capture & Analysis
Retirement Fund Value
Income Target, Income Profile
Minimum Income (Floor)
Capital/Death Benefit
Risk Profile & Capacity for Loss
Retirement Product
Modelling
Retirement Portfolio
Analysis & Optimisation
Investment Strategies,
Target Date
Drawdown: Flexible Withdrawal,
Capped
Guarantees: Variable Annuity
CPPI
Configurable Annuity Pricing
Equity Release
Client Risk Profiling
Product & Portfolio
Configuration Options
Risk-graded Investment Options
Configurable Optimisation
Functionality
Wealth Scenario Generator Layer
Stochastic
Asset Projections
Investment
Portfolio & Modelling
Product Rules &
Cash-flow Modelling
Mortality & Annuity
Modelling
Asset & Economic Modeling Layer
Asset Returns
Interest Rates
Inflation
Currencies/FX
Mortality
The Retirement Portfolio Planner helps you
build optimised propositions which fit your
clients’ income and capital needs.
The Retirement Portfolio Planner can be
configured to fit into your own customised
retirement product or advice service
proposition.
Retirement Portfolio Planner
The Retirement Portfolio Planner Helps Advisors Answer the Following:
»» How do we help the client seeking retirement income to understand their options?
»» How do we measure a client’s attitude to risk and capacity for loss, in a retirement planning context?
»» What is the optimal combination of products to deliver the client’s needs for income, capital and liquidity?
»» What is the most appropriate investment strategy, aligned with the client’s attitude to risk and capacity for loss?
»» How can I demonstrate and record suitability in relation to retirement income plans?
The Retirement Portfolio Planner includes our Award-winning Economic and
Investment Modelling Capability
The Retirement Portfolio Planner gives our clients:
»» Institutional quality stochastic modelling (economic scenario generation) capability.
»» Ability to capture key risk factors driving retirement outcomes: asset returns, interest rates, inflation and mortality.
»» Quarterly updates to economic assumptions, consistent with current market prices and market conditions.
»» Wide range of assets modelled consistently across multiple markets, including real estate, alternatives, hedge, commodities,
infrastructure, and emerging market debt.
»» A multi-currency, multi-economy model that supports advice and planning solutions in any market or currency.
»» Comprehensive documentation of all models and quarterly economic assumptions.
»» Ability to model a wide range of sophisticated product features: asset allocation glide-paths, constant proportion portfolio insurance
(CPPI), guarantees, investment-linked and variable annuities.
»» Modelling functionality that can be configured for the advisor’s own retirement proposition and product terms.
Integration and Deployment
The Retirement Portfolio Planner has a fully documented application programming interface (API), designed to support easy integration
with existing client services, platforms and toolsets. Our Implementation Services team help clients design and integrate their own
planning solutions.
Moody’s Analytics supplies the Retirement Portfolio Planner calculation engine and API, configured according to our client requirements.
Clients may then create the end-user interface according to their own brand and user experience requirements.
Alternatively, a number of solution partners have already integrated the Retirement Portfolio Planner into their financial planning
propositions and platforms, powering stochastic analysis for their clients.
2 MOODY'S ANALYTICS
Helping Customers Through the Drawdown Review
Process
Building a drawdown plan involves a difficult trade-off between current withdrawal
level, the risk of future income shortfall, and access to capital on death. With recent
difficult market conditions, and the impact this has had on many client drawdown
plans, advisors need tools to review clients' priorities, and present clients with options
to ensure retirement income plans remain on track.
Perform 'what-if' analysis to examine potential options to ensure a client’s income and
capital needs are met by their retirement plan and answer key clients’ questions:
»» Will I have enough income to maintain my standard of living?
»» Will my income last for my entire lifetime?
»» Will I have capital to leave my dependents?
How can the different options and risks be presented in
a way which reflects the client’s individual retirement
needs?
The Retirement Portfolio Planner can be configured to include a drawdown analysis tool
which helps advisors to assess the sustainability of a client’s current drawdown income
plan, given the underlying investment strategy.
Advisors can identify different options to mitigate the impact of reduced Government
Actuary Department limits and help ensure a customer’s retirement income plans are
sustainable and remain on track.
About Moody’s Analytics
Moody’s Analytics, a unit of Moody’s Corporation, helps capital markets and credit risk
management professionals worldwide respond to an evolving marketplace with confidence.
The company offers unique tools and best practices for measuring and managing risk through
expertise and experience in credit analysis, economic research and financial risk management.
By offering leading-edge software and advisory services, as well as the proprietary credit
research produced by Moody’s Investors Service, Moody’s Analytics integrates and customizes
its offerings to address specific business challenges.
MOODY'S ANALYTICS 3
CONTACT US
Visit us at barrhibb.com or contact us at a location below:
AMERICAS
+1.212.553.1653
[email protected]
EMEA
+44.20.7772.5454
[email protected]
ASIA (EXCLUDING JAPAN)
+85.2.3551.3077
[email protected]
JAPAN
+81.3.5408.4100
[email protected]
© 2014 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.
SP31247/101215/IND-103A