{"id":8364,"date":"2025-04-29T09:42:08","date_gmt":"2025-04-29T09:42:08","guid":{"rendered":"https:\/\/www.wealthtime.com\/advisers\/?post_type=blog&p=8364"},"modified":"2025-04-29T09:42:09","modified_gmt":"2025-04-29T09:42:09","slug":"protecting-against-sequencing-risk-in-volatile-markets","status":"publish","type":"blog","link":"https:\/\/www.wealthtime.com\/advisers\/blog\/protecting-against-sequencing-risk-in-volatile-markets\/","title":{"rendered":"Protecting against sequencing risk in volatile markets"},"content":{"rendered":"\n

Tony Hicks, Head of Sales, Copia Capital<\/strong><\/p>\n\n\n\n

To say global markets are in disarray this year is putting it mildly. The on-off-on-off imposition of tariffs and unpredictable \u2018adjustments\u2019 to President Trump\u2019s dramatic scheme to rebalance global trade in favour of the US economy has created widespread uncertainty.<\/p>\n\n\n\n

For those entering or already in retirement, this market turmoil will be particularly worrying. Ten years on from the introduction of pension freedoms \u2013 which triggered a shift away from traditional annuities and towards income drawdown \u2013 the issue of sequencing risk is more relevant than ever.<\/p>\n\n\n\n

We were already seeing renewed interest in guaranteed income products due to higher interest rates and persistent cost of living pressures. I expect the current volatility will further prompt advisers to consider how to best to help clients in decumulation cover their essential spending. However, for many investors, the idea of giving up all control of their pension pots and the potential to benefit from future markets growth \u2013 in exchange for the fixed payouts of a conventional annuity remains hard to accept.<\/p>\n\n\n\n

Our Select Retirement Income Plus (RI+) portfolios offer an innovative alternative. Designed to deliver more certainty in retirement outcomes, they provide a purpose-built decumulation strategy that combines flexibility with attractive guaranteed income.<\/p>\n\n\n\n

RI+ is a fresh approach to portfolio construction that works in conjunction with Secure Lifetime Income (SLI), a guaranteed income producing asset from Just Group. SLI is uncorrelated with equities and bonds, offering a low-risk asset class that can complement traditional assets. This enables the five RI+ risk-rated portfolios to increase their exposure to equities and alternatives, while reducing fixed interest assets, offering greater potential to outperform without increasing overall risk.<\/p>\n\n\n\n

Our expert fund management team manages the purpose-built investment portfolio alongside SLI\u2019s guaranteed income solution, providing drawdown clients with some mitigation against sequencing risk. With SLI delivering regular, guaranteed income, investors are less likely to be forced to sell assets during market downturns to generate normal retirement income.<\/p>\n\n\n\n

Beyond sequencing risk, the RI+ portfolios also address other key decumulation risks to help met the Consumer Duty requirement to avoid foreseeable harms. The include longevity leading to clients running out of money sooner than required, inflation eroding retirees\u2019 purchasing power, and rising interest rates impacting bond capital values.<\/p>\n\n\n\n

The chosen RI+ portfolio and SLI are held together within a SIPP, with income feed into the SIPP cash account. Income can be switched on or off as needed and can either be taken or reinvested in the RI+ portfolio, with the latter potentially boosting capital values significantly over time.<\/p>\n\n\n\n

While many investment managers will be focusing on diversification to help cushion against volatility, the RI+ portfolios are built differently. As the first decumulation portfolio strategy constructed to work in conjunction with a guaranteed income solution, it offers a different approach to downside protection, with asset allocation carefully optimised to balance expected return and drawdown risk.<\/p>\n\n\n\n

In today\u2019s uncertain market environment, it\u2019s more important than ever for advisers and their clients to review their retirement strategies. With RI+, investors don\u2019t have to choose between flexibility and certainty \u2013 they can have a solution designed to provide attractive rates of income alongside the potential for capital growth.<\/p>\n\n\n\n

See the RI+ information sheet<\/a> to find out more about the portfolios, or speak to your usual Copia Capital contact<\/a>.<\/p>\n\n\n\n

This article is intended for regulated financial advisers and investment professionals only. Copia does not provide financial advice. This information is not intended as financial advice and should not be interpreted as such.<\/em><\/p>\n\n\n\n

Find out more about Copia Capital ><\/a><\/strong><\/p>\n\n\n\n

<\/div>\n\n\n\n

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