Vanguard Australia has added to the digital tools it makes available to advisers with the launch of a Retirement Income Builder (RIB) modelling tools that maps the outcomes retirees can expect from a range of current and future financial scenarios.
The tool, which is designed for adviser use with clients approaching or in retirement, uses a range of factors, including client goals and spending, tax outcomes and the age pension, to forecast income and wealth in retirement.
Vanguard Australia head of intermediary Rebecca Pope said: “In discussions with advisers, it became apparent that existing tools were either too simplistic or overly complicated.
“The RIB tool has been designed to offer the right level of complexity; it is easy to use and client friendly while incorporating enough considerations to model retirement scenarios effectively.”
Vanguard noted an income-focused approach, reliant on interest and dividends, was being used by many investors to fund their retirement, but could not be sustained with the current lower level of distributions and interest rates, and a higher exposure to risk to generate income ran counter to their long-term interests.
The company added the RIB tool offered an alternative view using a total-returns approach, which moved away from selecting assets with a yield to match spending objectives and considered asset allocation at a level that supported spending requirements and used capital returns when necessary.
“The RIB tool brings the total-returns approach to life by enabling advisers to apply it simply and practically to their clients’ individual circumstances,” Pope said.
“It will help advisers use both the income and capital growth elements of portfolios to guide clients through different retirement scenarios.”
She said the tool, which was free to use, was part of Vanguard’s commitment to building a digital ecosystem to help advisers streamline their client service offerings and create efficiencies in their business models.
