IFA firms risk future complaints over high-risk decumulation funds

High-risk multi-asset funds regularly used for decumulation clients

Jenna Brown
clock • 2 min read

Drawdown clients are being exposed to high-risk investments without their knowledge as the majority of multi-asset funds are at the higher end of the risk spectrum, according to research from EV.

The financial technology provider warned the mismatch between risk exposure and client risk tolerance when utilising these funds could leave firms open to a barrage of future complaints.  EV said it had rated 170,000 funds for income risk and found 76% of the funds used for pension drawdown were at the higher end of the risk spectrum. It added that more than half of these funds had the word "retirement" in their name.  It found that the analysis contrasted with data from its income risk questionnaire, in operation since 2018, which showed that more than 85% of retirees have a low to m...

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