Centralised Retirement Proposition

Your Centralised Retirement Proposition (CRP) is a process that guides your approach to retirement income advice. Although most firms have a CIP in place, relatively few have a CRP. Under Consumer Duty and the FCA’s Retirement Income Review, a CRP is more important than ever before.

Retirement income strategies will need to take into account the impact of inflation, market volatility (and pound cost ravaging), life expectancy, desire to leave a legacy, Inheritance Tax position and lots, lots more.

Your CRP will need to cope with clients’ differing needs, whilst being consistent and repeatable.

What are the main considerations?

Documenting this process gives focus to points that can easily be overlooked. It also means advisers will work with a consistent approach across your company. Your CRP involves deciding on and documenting:

  • How you identify your target market.
  • How you assess risk when someone starts drawing on their portfolio.
  • How you’ll use forecasting, e.g., evidencing and recording your assumptions, and how you’ll stress test the forecast.

The investment and withdrawal strategies. Some of the considerations will be the same as for the CIP (link to CIP page). However, there are additional points to think about, including:

  • Certainty vs flexibility.
  • A combined approach (annuity and drawdown).
  • A ‘3 pots’ approach, managing the investment risk for different timeframes.
  • How you assess and manage income sustainability.
  • How will you approach annual reviews for these clients?

There’s arguably more risk involved for the client, because they’re now living on this money. How do you manage the situation to balance the investment risk with the potential for them to run out of money?

Would your business and clients benefit from 
putting a CRP in place?
Give us a call or pop us a message.