Back to school? The reality is we never leave
08 Sep 2022
For many, the recent weeks have been about the prospect of going back to school. It directly impacts our house this year with my son starting school. It’s fair to say that after three weeks he feels he’s given the “school thing” a go; it seemed ok, but he is now ready to try something else. I’ve not had the heart to tell him he’s still another (at least) 11 years left!! However, as we all know, the learning doesn’t stop there, to paraphrase Mark Twain, “When I was 16 my parents knew nothing, by the time I was 30, I was amazed at how much they had learned”.
This continual learning through life of course also applies to work - and this is definitely the case within HRIS - as we draw on our own, and Hymans Robertson’s broader knowledge, tooling and 100 years’ of Institutional experience to develop portfolios for Retail investors. This is particularly relevant when it comes to dealing with the challenges of retirement portfolios and the desire to generate long-term real returns while at the same time seeking to manage “sequence” risk – and the impact this can have on future sustainable income levels. A number of these key learnings, and what they mean for retirement solutions, are set out in the table below.
Key learnings |
What they mean for Retirement Solutions |
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Investment for decumulation is different to investing for accumulation
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Adverse outcomes early in the decumulation can significantly reduce sustainable income levels. Use forward looking scenario testing to identify the most robust investment solution for you. Place greater emphasis on “quality” assets and active managers with a focus on downside protection. |
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Beware of using averages when it comes to assessing longevity |
Wealth, health and lifestyle can have up to 12 years’ impact on life expectancy. It’s important to have a clear sense of an individual’s life expectancy, given their unique circumstances. |
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Technology can help you project and visualise future outcomes |
Technology can be used to combine a portfolios expected return outcomes, with individual longevity expectancy, to estimate realistic sustainable income levels. |
The reality is these are just a small number of the many learnings that we have from working with Hymans Robertson’s £350bn of institutional assets, and I’m sure there will be many more over the coming years. In the meantime, I now have to encourage a 5 year old to get his school uniform back ok…
