From static to strategic: Reimagining decumulation advice

Decumulation in the spotlight
The Financial Conduct Authority (FCA) has once again cast its gaze upon the retirement income advice market — and what it sees is a mixed picture. In its latest guidance, the regulator highlights persistent shortcomings in the way firms gather information, assess client risk, and model the sustainability of income withdrawals. The message, couched in the language of good practice and consumer outcomes, is nonetheless pointed: too many advisers remain rooted in approaches ill-suited to the realities of modern retirement.

Britain’s retirees are living longer, retiring more variably, and depending on increasingly complex financial arrangements. Yet, much of the advisory industry continues to rely on static cashflow tools and superficial risk questionnaires. This is not merely inefficient; it is increasingly non-compliant. The FCA’s expectations — shaped by the Consumer Duty regime — call for advice that is not only tailored and justifiable at the point of recommendation, but also dynamically monitored and revised in light of evolving circumstances.

A market divided
The wealth planning software landscape is not devoid of sophistication. Providers such as Voyant and Timeline have brought interactivity and engagement to financial modelling. Dynamic Planner and EV offer robust risk profiling frameworks. But integration between these tools is often limited, and many still rely on conventional Monte Carlo simulations grounded in historical returns — approaches the FCA now implicitly criticises for their failure to reflect contemporary market risks and for not extending analysis beyond average life expectancy.

Indeed, this fragmented toolkit risks creating advice that is neither comprehensive nor defensible. Firms face a dual imperative: to increase operational efficiency while demonstrating — in measurable, auditable terms — that their clients are on a sustainable path through retirement. This requires not more tools, but better orchestration of data, modelling, and review.

The OPAL approach
One platform seeking to address these challenges is OPAL, developed by Ortec Finance. Originally built for institutional asset-liability management, OPAL brings a level of rigour to private client advice that reflects its heritage in pension and insurance balance sheet fund modelling.

OPAL offers a unified, goals-based framework in which client fact-finds, risk assessments, product suitability, and market simulations are not separate processes but constituent parts of a single planning engine. It is a tool not merely for constructing financial plans, but for stress-testing them continuously — against more than 700 economic variables updated monthly.

Unlike standard Monte Carlo simulations, OPAL’s scenario generator incorporates current yield curves, inflation expectations, and volatility regimes. It accounts for the inconvenient reality that markets shift, rates revert, and retirement rarely goes to plan. It can model the implications of taking more from ISAs than pensions, or of front-loading withdrawals during a bull run. Most crucially, it updates feasibility scores daily — enabling advisers to identify emerging risks before the next scheduled review.

Compliance by calculation
What does this mean in practical terms? An advice file built within OPAL captures client goals, preferences, and constraints in a format auditable by both internal compliance and external regulators. Portfolio recommendations can be matched precisely to both risk capacity and product risk, avoiding the mismatches the FCA now deems unacceptable. When clients’ circumstances or market conditions change, OPAL’s alerts prompt timely reassessment — turning periodic review from a chore into a compliance safeguard.

The system’s ability to integrate with portfolio management systems and CRM platforms, such as Salesforce, enables firms to reduce administrative burdens while improving the fidelity of their advice. Its client-facing outputs — white-labelled, portal-enabled, and clear — support the transparency and trust the FCA rightly regards as foundational.

Towards intelligent advice
The FCA is unlikely to relax its stance on retirement advice. As the regulator raises the bar for evidencing good outcomes, firms must choose between incremental patchwork and holistic transformation. Tools that merely illustrate projections will no longer suffice; systems must explain, adapt, and withstand scrutiny.

OPAL does not claim to replace the adviser’s judgement. But in a world where financial plans are fragile and oversight is unforgiving, it offers a disciplined, dynamic infrastructure — turning regulatory obligation into advisory advantage. As retirement becomes a process, not an event, the planning that supports it must become a living system.