Henry Cobbe: How to mitigate risk in retirement portfolios

Advisers running decumulation portfolios have to consider the key retirement risk known as ‘shortfall risk' - essentially the possibility a client will run out of money in retirement. Shortfall risk has four main drivers: Sequencing risk: Risk and return expectations vary depending upon different time horizons. This can be mitigated by ensuring the asset allocation is appropriate for the time horizon.  Longevity risk: This is the risk that clients outlive their assets and it can be mitigated by applying a matching ‘safe withdrawal rate' for a given time horizon, based on life expec...