Planning clients’ income with the natural income workflow

Clients in the decumulation phase who are interested in generating regular or one-off withdrawals using natural income have different needs to clients in the accumulation phase. Standard ATR questionnaires do not take into account capital preservation and income volatility, thus not painting the whole picture. That's why we developed our natural income workflow.

Natural income workflow

Income Risk Profiles

Our natural income workflow has an integrated psychometric questionnaire, created by ourselves in collaboration with A2Risk and is tailored specifically towards clients looking to withdraw an income, which is unique to Engage Core.

Unlike the ten Risk Profiles used in the accumulation workflow, our natural income workflow has four Income Risk Profiles:  Low Income Volatility, Medium Income Volatility, High Income Volatility and Capital Preservation.

By adding in your client’s investment data and a required level of income, Engage Core’s historic yield analysis shows the amount of natural income produced from funds categorised into each of Defaqto’s four Income Risk profiles and demonstrates how capital values have fluctuated over the last 10 years.

Through discussion with your clients, you can agree an Income Risk Profile and then research suitable Income Risk rated funds.

Income risk categories

Income risk rated funds

We have a robust process to risk rate natural income funds that allows advisers to match against the clients’ agreed Income Risk Profile. We look at several criteria including historic income and capital volatility, income consistency, capital drawdown and asset allocation. This is complemented by a discussion with the fund manager to ensure the fund is income risk rated appropriately. We provide all the evidence and documentation you need to back up your recommendations within the Engage Core toolkit.

Income risk rated funds in Engage Core

Request demo

Let us show you how Engage Core can help you deliver client-centric, compliant advice. You can either call us on 01844 295 546, email sales@defaqto.com or complete the form below.

 

Share this