Could your client use a smoothed fund to manage volatility?

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For many clients’ approaching or have just entered their retirement journey, the prospect of a falling pot value affecting their ability to draw a steady and consistent income would be a real concern. For them, it’s hard to view market volatility objectively, because it can have real and subjective effects on their daily lives. So how might you help clients to mitigate some of this risk and ensure they don’t react too harshly to events that could have a negative impact on the investment markets?
 
One option is through the use a smoothed fund. The Standard Life Smoothed Return Pension Fund aims to dampen the effects of day-to-day market volatility by using a smoothing mechanism, while smoothing cannot eradicate market risk, it’s a tool you can use that could give your clients a stronger foothold for their life in retirement. You can use it alongside other retirement income strategies such as annuities or traditional multi-asset funds to tailor a client’s portfolio according to their attitude to risk and financial personality.
 
With market and global uncertainty showing little sign of slowing down, don’t underestimate the power of smoothing to give your clients some comfort, predictability and breathing space.