Thesis Asset Management launches new decumulation service

Thesis Asset Management has launched a unique decumulation portfolio service targeting the delivery of long term income while mitigating the risks of investing in the near term.
The Managed Income Service will be invested in two broad asset types, lower risk defensive assets (wealth preservation) from which the desired income is derived, and higher risk growth assets (wealth accumulation) intended to increase the portfolio value over time.
The wealth accumulation portfolios mirror the existing Thesis collectives model portfolios four to seven (moderate to high risk). The models comprise a blend of predominantly actively managed funds, diversified geographically and across different asset classes.
The Managed Income Service actively rebalances quarterly between the lower and higher risk assets, producing the required income from the lower risk assets in the early years. This aims to prevent volatile equities being sold into a market downturn, while maintaining an increasing exposure to the market to capture long term growth and address the risks of inflation and longevity.
The portfolio is gradually migrated, typically over a five year term, until it is fully invested in the model portfolio that matches the client’s risk profile.
The Managed Income Service carries the same management fee as the firm’s existing model portfolios (0.75% on Thesis nominee; minimum fees apply).
Lawrence Cook, Director of Marketing and Business Development, said: “Advisers are increasingly aware of the different risks investing for income brings compared to the savings or accumulation phase. They have told us there is a real lack of innovation to meet client needs. As a result of that feedback we have developed our new service, Managed Income Service, which we believe will be a great help in managing the decumulation risks.
“Investors face a number of risks as they reach the age of retirement and can access their pension pots. Volatility, inflation, longevity and sequencing risk can all have devastating effects on portfolios, so it is vitally important that products and services are available to help people plan their finances throughout retirement.
“The new service aims to give investors peace of mind in the early years of drawing income from their portfolio, while maximising the opportunity for the bulk of their investments to grow over time. Rather than capture all the movement of underlying markets, it is designed to reduce the exposure to the riskier assets early on, and give the portfolio a better chance of delivering income over the long term.”