M&G special report - From retirement planning to retirement confidence IHT inheritance tax trusts

How advisers can turn retirement planning into retirement confidence

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Retirement is not simply accumulation in reverse. Advisers need to balance growth, security, flexibility and client behaviour if they are to build plans that work over several decades.

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Retirement planning has traditionally focused heavily on investment performance, pension pots and withdrawal strategies. But as retirements become longer and clients’ needs more complex, advisers may have to think more broadly about what a strong retirement proposition should deliver. That was one of the central themes to emerge from a recent Money Marketing webinar, held in association with M&G, ‘Turning retirement planning into retirement confidence’. This discussion, the second in a series of two, brought together Dan Haylett, financial planner, retirement coach and founder of Humans vs Retirement, and Karen Fitzpatrick, pension specialist at M&G. It focused on how advisers can move beyond accumulation-style thinking and build retirement plans that balance growth, stability and flexibility while also giving clients confidence to spend.

A 30-year retirement shouldn’t be treated as one flat, equal period of spending and needs

The panel also stressed that retirement should not be treated as one uniform period. Haylett described time in retirement as “asymmetric”, with spending, health and priorities likely to change substantially over several decades. Clients may initially have the combination of money, health and time that allows them to spend more on travel and other discretionary priorities. Spending can fall later in retirement, while demand for certainty may increase. Haylett suggested this could lead some clients to annuitise more of their assets later in life, particularly as their priorities move away from flexibility and towards dependable income. Fitzpatrick said advisers should therefore build adaptable frameworks rather than fixed plans. “A 30-year retirement shouldn’t be treated as one flat, equal period of spending and needs,” she said. Clients may spend more or less than anticipated, decide to return to work or experience changes in family circumstances or health. Advisers consequently need to provide enough structure to give clients confidence without creating a plan that cannot adapt as circumstances change.

Retirement is ‘asymmetric’

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By Tom Browne

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A new retirement mindset with Ed Green

Moving beyond accumulation thinking

For Fitzpatrick, the starting point is recognising that retirement is not simply accumulation in reverse. “In accumulation, the client is focused on building the biggest pot possible,” she said. “The question becomes: how can that pot deliver the income, the confidence, the flexibility and the good decisions over what could be a really long period of time that the client’s retired?” That means shifting the conversation away from simply asking which investment is best and towards what the client actually needs their money to do. Fitzpatrick identified several elements advisers should consider, including clients’ life objectives, essential and discretionary spending, legacy ambitions and the risks posed by inflation, longevity and market volatility. Different parts of a retirement plan can then be allocated different roles. Some money might provide certainty of income, while another portion could offer flexibility, liquidity or long-term growth. Rather than rely on a single product or strategy, Fitzpatrick argued that advisers should think in terms of “retirement income design”. Clients may want certainty, flexibility, control and the ability to leave money behind simultaneously, she said. Advisers therefore need to consider the job each part of the portfolio is intended to perform. Cash might provide short-term liquidity, guaranteed income could cover essential expenditure, while drawdown and longer-term investments could provide flexibility and growth. “It’s moving away from a single answer and more towards a retirement toolkit,” Fitzpatrick said. “The most effective plans [are] where every pound of the money has a purpose.”

Haylett

I encourage advisers to ask clients more frequently, ‘How does that make you feel?’ It can reveal information that cannot be captured through financial modelling alone

Retirement is a human transition

Haylett argued that the change required is not purely financial. Advisers also need to recognise retirement as a significant behavioural and emotional transition for people who may have spent several decades accumulating wealth. “This is more of a human transition than a money problem,” he said. Clients who have spent much of their working life saving are suddenly being asked to reverse a deeply ingrained habit and begin spending those savings. As a result, Haylett believes the language advisers use matters. Technical terms such as ‘decumulation’ and ‘income withdrawal strategy’ may be less helpful to clients than concepts such as retirement salary, spending pot or money allocated for particular experiences. “The proposition now for a modern-day retirement includes the human and the behaviour, more so than just the numbers,” he said.

Fitzpatrick

The proposition for a modern-day retirement includes the human and the behaviour, more so than just the numbers

Haylett

That flexibility also extends to conversations about long-term care. Both speakers argued that advisers should address clients’ fears about care without automatically building plans around the worst possible outcome. Fitzpatrick said stress testing could help advisers understand how care costs might affect a plan, while Haylett suggested earmarking part of a portfolio for potential future care expenses where appropriate. But he argued the discussion should also focus on clients’ desire to preserve dignity and independence and avoid becoming a burden on their family.

Building care costs into the plan

This approach means moving away from a single answer and towards a retirement toolkit. The most effective plans are where every pound has a purpose

Fitzpatrick

View the full webinar below

Tom Browne

Editor Money Marketing

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Dan Haylett

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Financial planner, retirement coach and thought leader

Karen Fitzpatrick

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Pension specialist M&G

Tom Browne

Tom Browne is the editor of Money Marketing, the award-winning website for financial intermediaries in the UK. He has over 20 years of experience in journalism and editorial, including as editor-in-chief of Reader's Digest.

Webinar presenters

Dan Haylett

Dan is on a mission to transform how we think about and plan for retirement. As the founder of Humans vs Retirement and director of TFP Financial Planning, Dan helps people navigate the messy middle between work and what's next. He’s not your typical financial adviser. His approach blends behavioural science, life design and human-focused strategies to help people build a rich, fulfilling retirement, financially and emotionally. A dynamic speaker and podcast host, and trusted guide to clients in one-to-one retirement planning conversations, Dan is known for challenging outdated retirement narratives and replacing them with honest, engaging and often humorous insights. Whether he's on stage, on the airwaves, or designing tools and frameworks for his clients, Dan helps people see retirement for what it really is: a complex human transition, not just a numbers game.

Karen Fitzpatrick

Karen Fitzpatrick, a chartered financial planner, brings over 30 years of expertise in the pension and investment industry. Her extensive career includes roles with major providers, showcasing her deep understanding of financial planning and investment management. Karen excels in collaborating with financial advisers, ensuring they deliver optimal solutions to their clients. Her dedication to the field and her comprehensive knowledge make her a trusted and respected professional in the financial advice community.

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Find out how M&G’s tools, support and products can help you build retirement confidence. Visit the home of retirement planning here

Balancing growth with security

The emotional dimension becomes particularly important when advisers try to balance the need for long-term growth with clients’ concerns about market volatility. A retirement lasting 30 years or more may require significant exposure to growth assets to preserve spending power against inflation. At the same time, clients may be uncomfortable seeing money they expect to rely on fall sharply in value. Haylett suggested separating short- and long-term requirements. Money that clients expect to spend within the next 12 to 24 months should generally not be exposed to market movements, he said. Cash and guaranteed income can be used to meet immediate requirements, potentially giving clients greater confidence to take investment risk with money they will not need for many years. That can create greater ‘risk budget’ elsewhere in the portfolio, allowing longer-term assets to retain higher equity exposure while short-term needs remain protected. Fitzpatrick agreed that presenting retirement as a choice between growth and security creates a false distinction. Most clients require both, she said, but not necessarily from the same part of their plan. “If a client takes too little risk, inflation’s going to quietly erode that spending power across decades,” she said. “But if they take more risk than they can emotionally tolerate, they may abandon the strategy at exactly the wrong time.” That means behavioural suitability can be as important as investment suitability. Two clients could have identical financial capacity for loss while responding very differently to a fall in their portfolios. One of the greatest threats to a retirement plan may therefore be not volatility itself but the client’s reaction to it, Fitzpatrick added.

Asked for one practical change advisers could make to strengthen their retirement proposition, Haylett returned to the emotional side of planning. He encouraged advisers to ask clients more frequently, ‘How does that make you feel?’ Understanding how a client feels about guaranteed income, spending, investment losses or future uncertainty can reveal information that cannot be captured through financial modelling alone. Fitzpatrick’s recommendation was similarly client focused. She suggested redesigning retirement conversations around income, purpose and confidence rather than assets. Clients, she said, “don’t live on pension valuations, they live on their income”. The aim should be to create plans in plain English that clients can understand, including which money pays the bills, which provides flexibility and which is intended for family or longer-term objectives. That clarity, she argued, can turn a technical recommendation into a retirement plan the client can genuinely understand and believe in.

Start with how the client feels

Managing uncertainty

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Giving every part of a client’s wealth a clear job can make retirement advice easier to explain, implement and review

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Retirement planning has never involved just a single risk. But the environment in which today’s clients are drawing an income has made the connections between those risks harder to ignore. Market volatility, inflation, longevity, changing tax rules and client behaviour can all affect the same plan. A decision designed to manage one risk may increase exposure to another. Holding more cash might reduce short-term volatility, for example, but could weaken purchasing power over a long retirement. Creating greater income certainty may provide reassurance, but it can also reduce flexibility if circumstances change. That makes it difficult for any one product or investment solution to meet every retirement need. A more useful starting point is not “Which product should we recommend?” but “What does the client need this money to do?”

One way to make this more practical is to organise wealth by purpose rather than simply by product or tax wrapper.

Give the money a job

It is an evolution from product selection towards integrated lifetime planning

Consumer Duty has increased the focus on demonstrating good outcomes and client understanding. Purpose-led planning can support that by making the reasoning behind recommendations more visible. Rather than documenting only what was recommended, advisers can show why each element is held, what client need it addresses and how its success will be assessed. Stress testing can also be translated into real-world consequences. A percentage fall may feel abstract, while its potential effect on income, spending or future choices is easier for a client to understand. Research also highlights the importance of behavioural support. In M&G’s Investor Compass research, 96% of advisers agreed that a significant part of their value came from helping clients remain disciplined and avoid emotional decisions. Meanwhile, 81% of investors said their adviser made them less likely to react with short-term changes during volatility. A clear sense of purpose can strengthen that support. When clients understand what each part of their wealth is there to achieve, short-term market movements are easier to place in context. The aim is not to remove uncertainty. No retirement plan can do that. It is to build advice that connects risks, clarifies priorities and adapts as life changes. Start with why the money is there. Define its job. Then let the product, investment and tax decisions follow.

Evidence the reasoning, not only the result

From retirement planning to retirement confidence

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Purpose-led planning can also improve ongoing reviews. Traditional investment reviews can quickly become dominated by relative performance. Which fund performed best? Which lagged its peers? Should the portfolio be changed? Those questions matter, but they should not come before the client’s circumstances. A purpose-led review begins elsewhere: • What has changed for you? • What has changed for your family? • Has your spending changed? • Do you feel differently about uncertainty? • What do you need your money to do next? The adviser can then assess whether each component is still doing the job for which it was selected. If the client’s objective remains unchanged and the solution continues to fulfil its role, that provides a clear foundation for the ongoing recommendation. If the job has changed, the plan may need to change with it. This creates a repeatable process without making advice generic. The framework remains consistent, but the priorities, trade-offs and resulting recommendations stay personal to each client.

Make advice easier to explain and review

Ed Green is a pension and investment specialist with more than 25 years’ experience in the financial services industry. He has worked with several of the UK’s leading life insurance providers and has spent the past 13 years at M&G, focusing on the development and delivery of retirement and investment solutions. With a strong technical background and a practical approach, Ed works closely with financial advisers to help them navigate complex areas such as tax planning, product structures and investment suitability in a changing regulatory landscape.

A new retirement mindset

By Ed Green, Pension and investment specialist, M&G

Retirement income, tax and legacy planning are often discussed separately. For clients, however, they form one interconnected financial journey. The way a client draws an income today can affect the tax they pay, the flexibility they retain and the wealth eventually available to their family. Advisers therefore need to look beyond individual transactions and consider the trade-offs across the client’s lifetime. This shifts the focus of advice. Product and investment suitability remain essential, but the adviser’s wider value lies in helping clients understand complex choices and make informed decisions. It is an evolution from product selection towards integrated lifetime planning. That role becomes even more important as information becomes easier to access. Technology can support research, analysis and efficiency. Yet information alone does not tell a client what matters most, how competing objectives should be prioritised or which compromises they may need to make. Those decisions still depend on human judgement, experience and the ability to translate technical detail into something meaningful.

Retirement outcomes are connected

Start with why the money is there. Define its job. Then let the product, investment and tax decisions follow

Find out how M&G’s tools, support and products can help you build retirement confidence. Visit the home of retirement planning here

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The four broad needs of living, lifestyle, luxury and legacy provide a useful framework:

• Living: the essential expenditure that must be met reliably • Lifestyle: regular spending that supports the retirement the client expects to enjoy • Luxury: discretionary ambitions and larger one-off experiences • Legacy: wealth the client hopes to pass to other people

Each need has different characteristics. Some money may need to provide dependable income. Some may need to remain accessible. Some may need to grow above inflation over the longer term. Some might ultimately be passed to family. Once those jobs are clear, advisers can consider an appropriate combination of income, investment and planning tools for each one. The result is not a collection of unrelated pots. It is a layered plan in which every component has a defined purpose. Consider a client retiring before their state pension begins. One part of their wealth might bridge essential income until that point. Another could support flexible lifestyle spending, while longer-term assets pursue growth for later retirement or a future legacy. The value of the example is not the specific solution selected. It is the clarity created by separating immediate, flexible and long-term needs.

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