Financial services technology provider EV has enhanced the functionality within its EVPro end-to-end financial planning solution to help advisers meet the FCA’s expectations for avoiding foreseeable harm.
This enhancement, integrated into EVPro’s Goal module, provides advisers with a method for testing the sustainability of clients’ retirement income.
The new functionality enables advisers to assess how much a client can afford to spend in retirement based on their financial situation. It considers the client’s existing assets, all sources of income including the State Pension, planned retirement age and expected mortality. Using stochastic modelling, it calculates an affordable expenditure based on the level of certainty required. The target annual expenditure is expressed in today’s terms, allowing for increases with inflation, making it easier for clients to understand.
This capability complements EVPro’s existing suite of calculators, which help advisers determine when a client can afford to retire or how much more they would need to save to retire at a desired age.
Gemma Brazier, Product Owner at EV, comments: “A year on from the FCA’s thematic review of retirement income advice, advisers are looking more closely at the sustainability of their client’s projected retirement income. In response to adviser demand, we have introduced a third retirement calculation, alongside assessing when a client can afford to retire and how much more they need to save. The new functionality calculates the annual expenditure that a client can afford in retirement based on their current assets and income, and the level of certainty they want over their income. Achieving the same realistic calculations manually, factoring in inflation and thousands of different market scenarios, would be almost impossible. Thanks to EV’s stochastic engine which underpins all its solutions, EVPro produces the result in seconds.
“Late last year, the regulator confirmed its intention to continue reviewing retirement income advice in 2025 to ensure good outcomes for consumers. With growing pressure on consumers’ finances in retirement due to market volatility, the rising cost of living and increasing longevity, understanding the sustainability of an individual’s income is essential to delivering good advice and preventing foreseeable harm. We’re continuously evolving EVPro’s functionality to support advisers in safeguarding their clients’ financial futures.”