When the FCA published its thematic review of retirement income advice in March 2024, it caused a bit of a stir across the industry. Not because the findings were surprising, but because they made one thing clear; Planning for retirement income is no longer just about choosing the right product, it is about outcomes, it is about long-term sustainability, it is about demonstrating that you are helping clients make decisions that work throughout their retirement years. Steph Willcox, Head Actuary, Dynamic Planner gives us her expert views on the review and demystifies the details.
Since that review was released, I have had dozens of conversations with advisers. From solo practitioners to large national firms, the message is consistent. We need to rethink how we approach income planning, and more importantly, how we communicate and deliver it.
Let’s explore what has changed on the ground.
The core message: It is not about the product
The FCA were strong in their messaging: retirement income advice must be based on the client’s life, not just the product they are being recommended.
That means:
- Focusing on whether the client’s income will last under real-world assumptions, not just whether the plan looks suitable on paper
- Ensuring there is a process for regular reviews, rather than setting up a drawdown strategy and forgetting about it
- Properly modelling risks such as longevity and sequence of returns, and explaining these in a way that clients can genuinely understand
- Recording not only the recommendation itself, but also the reasoning that led to it
The review is not asking firms to throw everything out and start again, but it is asking for greater clarity, care and personalisation in the advice process.
A more meaningful fact-find
A shallow fact-find is no longer acceptable when planning retirement income, advisers need to go beyond the basics and get to the heart of what matters most to clients.
This includes:
- A detailed understanding of health and longevity, not just a client’s current age
- Real lifestyle costs, broken down into essential, discretionary and luxury categories, and how those may change over time
- A fresh review of the client’s attitude to risk and capacity for loss, to ensure these are still appropriate as they move into retirement
- Understanding how the client wants their retirement income to work, including preferences around flexibility and certainty
- Assessing any signs of vulnerability, and how these may evolve over time
It is important to check that any changes in the risk profile are due to genuine shifts in the client’s outlook or situation, and not simply changes in the risk assessment tool being used. The FCA stressed that rechecking attitude to risk and capacity for loss at retirement is a key part of delivering suitable advice, as well as ensuring that you method of assessment is consistent across all clients.
For clients with significant savings, conversations around how they want to access their funds are essential. Some options, such as buying a guaranteed income product, are irreversible. That makes it critical to ensure the client understands the consequences and trade-offs of the decisions they are making. Documenting these discussions clearly is also vital.
Vulnerability remains a key area for the FCA, and ensuring you understand your client’s vulnerability characteristics, have documents them, and have tailored your advice to reflect these characteristics is of increasing importance. You may want to set a review date for their vulnerability assessment, particularly if it is expected to be a short-term vulnerability, to ensure that you’re checking in with your clients at an appropriate time.
Creating meaningful cash flow plans
Building a strong cash flow plan is not about creating a flawless prediction. It is about helping clients understand how their income, spending and assets interact over time. The plan needs to be realistic and flexible. Life changes, and the plan should be able to change with it.
As you gather more information from your client, your planning software should help you integrate that detail directly into the plan. That includes tracking changes in expenses over time, and highlighting any shortfalls, even in essential spending, under different assumptions.
Getting the balance right is important. The plan needs to be personal and accurate, but also simple enough to support productive conversations. Some clients will want to dig into every assumption. Others will want an overview with clear visuals. The approach will vary from one client to the next.
At its best, a cash flow plan opens up the discussion, helping clients think through trade-offs. Should they retire earlier and spend less later? Should they keep working part-time for longer to maintain flexibility? These are the kinds of decisions that become clearer when the numbers are on the table.
A well-built plan gives clients clarity, direction and confidence in the journey ahead.
When you’re using cash flow to create retirement strategies, this means that clients will be able to recognise themselves in the plan. This makes it more likely they will stick to the plan and feel engaged in the process. And that, ultimately, is what makes the plan work.
Making stress-testing useful
Stress-testing has long been a requirement, but it is now one of the most valuable parts of the planning process. When done well, it can turn a static plan into a living, breathing tool that clients engage with.
Advisers are increasingly using interactive planning sessions to explore different scenarios with their clients built around the real questions clients have, such as:
- What happens if I live to 105?
- What if my investments perform poorly for the next decade?
- What if I have to go into care?
- What if I want to spend more on family support or travel?
The FCA highlighted that many firms were not addressing longevity risk with enough care. Relying on average life expectancy is no longer enough, and you should ensure you are planning for much longer than average life expectancy.
Clients also need to see how their plan holds up under different stresses, especially those they are worried about, to build trust between advisers and clients. Clients who understand that their plan can cope with a range of outcomes are far less likely to panic when markets fall or when the headlines look bleak.
Even more importantly, these sessions reveal what clients truly value — and where the advice process can support them most.
Ongoing advice is now essential
Perhaps the biggest cultural shift highlighted by the FCA is the need for retirement advice to be ongoing. Retirement income planning is not a one-off event. It is a process that plays out over twenty or thirty years.
That is why firms are embedding structured review points into every plan. These include:
- Annual check-ins, focused on income sustainability and any changes in circumstances
- Reviews triggered by specific events, such as withdrawals increasing to a certain level or reaching a certain age
- Alerts when portfolios drop by a certain percentage, prompting a review of income levels, investments or spending plans
Clients want to know their plan is being looked after. Not in a vague, “call me if you need me” kind of way, but through a clear and proactive process. That is what builds confidence, and that is what delivers value over the long term.
The FCA has also been very clear that ongoing advice needs to be well documented. Each review should capture what was discussed, what changed and how the plan continues to meet the client’s objectives.
Communicating clearly and accessibly
Even the best plan will fall flat if clients do not understand it. The FCA pointed out that many clients found the language used in reports difficult to follow, which puts the success of the advice at risk.
Firms are now placing greater emphasis on clarity and accessibility in their communications. This includes:
- Writing reports in plain English, suitable for a reading age of around nine
- Using larger font sizes and layouts that are easy to read
- Creating visuals with accessible colour palettes that consider colour blindness and other visual impairments
- Including timelines and graphs that show how income, spending and savings change across retirement
- Explaining risks and trade-offs in a calm, friendly and transparent way
Clients want to feel in control. When they understand their plan, they are more likely to stick with it and less likely to panic when the unexpected happens.
Suitability: Recording your thinking clearly
Another key finding from the FCA was the need to show the full thinking behind the recommendation. A suitability letter is not just about stating what you advised. It is about explaining why.
That means showing:
- How the client’s goals and preferences were reflected in the plan
- What alternatives were considered and why they were not chosen
- How risks were discussed and agreed upon
- How client needs were prioritised when there were trade-offs
Good documentation creates transparency. It helps the client stay engaged, and it also creates a clear foundation for future reviews and changes.
Final thoughts: This is a moment to raise the bar
The FCA’s review was not a trap. It was a prompt. It asked whether advisers are truly helping clients build retirement plans that can stand the test of time.
The most forward-looking firms are responding with confidence. They are combining robust modelling, clearer communication and deeper personalisation to create retirement strategies that work in the real world.
If you are wondering where to begin, start with the conversation. Talk to your clients about what they want their retirement to look like. Show them what is possible and be open about the risks. Build a plan together, and keep checking back to make sure it still fits.
This is not just about ticking regulatory boxes. It is about doing income planning better — and giving people real confidence about the years ahead.
About Steph Willcox
Steph Willcox FIA C.Act. is Head Actuary at Dynamic Planner. Steph leads the actuarial responsibilities of Investment Services. She is responsible for ensuring the software represents future events accurately and in line with mathematical and actuarial principles and the Asset Risk Model. Steph reports to Chris Jones, Proposition Director at Dynamic Planner, working alongside other key team members including Abhi Chatterjee, Chief Investment Strategist, Jim Henning, Head of Investment Services and Jason Dewar, Head of Research.
