How Asset Managers Can Implement Integrated Solutions To Streamline Decumulation

Banking CIO Outlook | Wednesday, July 06, 2022

The Canadian retirement process involves strategic planning and execution for a smooth sailing retirement process.

FREMONT, CA: Increased life expectancy, an older population, and rising demand for a more fulfilling retirement have all played major roles in the evolution of the retirement scene in Canada throughout time. Millions of Canadians are rethinking whether to retire due to the COVID-19 pandemic, which has had a substantial effect on the retirement market. As a result, investors are now seeking to advance their mental and emotional health goals in addition to their financial prosperity.

This encourages a shift toward healthy retirement plans beyond conventional financial objectives to consider factors like creating a legacy, improving one's health and fitness, and viewing more significant purpose considerations. Retirees are altering their expectations for their retirement, but they are also dealing with rising portfolio volatility and dropping yields. As businesses enter the decumulation phase, they look for downside protection techniques to guard against extreme downturns and guarantee quicker recoveries.

Integrated solutions

In the modern world, most investment firms lie between Conceptual and Holistic. Asset managers have the chance to move upstream along the retirement spectrum by offering more integrated solutions and a range of services that go beyond the basics. Such integrated solutions frequently concentrate on providing advisers with improved support, typically offered through greater involvement and a stronger emotional bond.

Asset managers can offer customized solutions to distinct adviser groups, including retirement-specific products and service suites, decumulation-focused approaches, intellectual management, training, technologies, and resources. Asset managers can differentiate themselves from established companies and provide value-added services to their clients by offering these solutions.

Client engagement

Investment firms have the chance to boost client engagement initiatives to stay top-of-mind and maintain a level of competitiveness as competitors in the Canadian retirement landscape rise. Asset managers can try to differentiate themselves from the competition by offering an online environment that customers can directly access and use to run sandbox retirement scenarios with various tools to remain ahead of the game.

Advanced skills and capabilities

In the retail market, asset managers are starting to utilize tactics and strategies usually used by the insurance and pension industries, which calls for hiring non-traditional talent. Examples include modeling expertise to create alternative product strategies that give downside mitigation, actuarial expertise to create insurance-like products, and behavioral economics domain knowledge to better describe behavioral biases. Asset managers need to be strategic and explore what extra skill sets and skills could be necessary as the industry continues to change toward wellness and intentional retirement.

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