MetLife has launched a “Capacity for Loss” online tool kit aimed at helping independent financial advisers gain a deeper understanding of a client’s ability to handle financial loss in the pre-retirement years.
With regulatory guidance highlighting the need for advisers to evaluate a client’s ability to absorb falls in the value of their investments, the firm believes there is an advice and information gap for advisers seeking to be compliant in this area.
According to MetLife, the average 50-year-old has £54,300 saved in pension funds with a gap of £68,600 to fill in order to meet a pensioner’s minimum annual income needs.
Therefore, most savers in the pre-retirement phase have very limited capacity for loss, making sound financial advice vital.
MetLife product marketing director, Peter Carter, comments: “The near-retirement and in-retirement segments need to focus on a range of strategies including investment guarantees and protection products in the light of the continuing very challenging investment returns environment.”