Bringing you live news and features since 2006 

Flexibility and security are top investment priorities for retirees, says Aegon

RELATED TOPICS​

New research from Aegon has highlighted the changing investment preferences of those in retirement, with a shift in both attitudes and the way retirees take benefits as they embrace pension freedoms.

Some 54 per cent of advisers said that their clients’ number one priority in retirement is flexibility, with risk reduction second at 33 per cent. This emphasis on flexibility is a consequence of pension freedoms and a function of demographic and social change. Faced with improving health and increased financial challenges, many investors are retiring gradually over time. As retirement is increasingly a process rather than a fixed event, investors naturally require flexibility in their pension planning. The trade off – perhaps even conflict – between flexibility and risk reduction is not easily understood by investors and highlights the need for advice to help navigate through individual investors’ competing requirements.
 
Reinforcing the need for advice, retirees are embracing pension freedoms and have materially shifted away from annuities. The FCA’s Retirement Outcomes Review, published in July 2017 found that twice as many pots were going into drawdown than annuities.
 
The rise in income drawdown is accompanied by growing interest in highly diversified strategies. Research shows that on average, over two-thirds (67.6 per cent) of assets for retiring clients are being allocated to multi-asset and diversified equity strategies.  By contrast, ‘traditional’ retirement instruments such as fixed income, annuities and guarantees account for only 22 per cent of a typical retiring clients’ portfolio.
 
Nick Dixon, Investment Director at Aegon, says: “Pension freedoms have paved the way for retirees to adopt a new attitude and approach to how they manage income in retirement. Our research shows that flexibility is the watchword for retiring clients, in how they access their money, their level of income, and the investment strategy they adopt. Demand for advice is rising driven both by the structural shift away from annuities and by the competing needs of investors who require expert advice to help manage complex trade-offs.”

Latest News

HSBC Asset Management’s (HSBC AM) ETF and Indexing business has passed USD100 billion in assets under management (AUM), reflecting its..
Amundi’s ETF Market Flows Analysis for April reveals that investors added EUR54.1 billion to global ETFs in April with equities..
VanEck has reached USD10 billion in assets under management in Europe for the first time in April 2024...
Global index revenues increased 9.3 per cent in 2023, totalling a record USD5.8 billion, according to a benchmark study published..

Related Articles

Dan Miller, IQ-EQ
With just over a week to go till T+1 settlement begins in North America, Canada and Mexico, time is of...
Emily Spurling, Nasdaq
Last October’s ETF Express US Awards 2023 found Nasdaq winning Best Index Provider – ESG ETFs and Best Index Provider...
Vinit Srivistava, MerQube
Index provider, MerQube, launched in 2019, with the aim of providing a “technology-driven answer to the most complex, rules-based investment...
Sean O' Hara
Pacer ETFs has announced the launch of three Cash Cows UCITS ETFs. The firm writes that this will give European...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by