Financial planning isn’t just about investment returns; it’s about how those returns translate into meaningful spending. Saving is simply deferred spending, and understanding how to convert your capital into purposeful expenditures is crucial.
Your financial journey encompasses diverse goals: managing irregular earnings, raising a family, or enjoying retirement. Each goal has its own timing and significance. Our advanced modelling goes beyond assumptions of arbitrary returns, delivering precise, actionable insights to optimise your spending strategy.
Retirement & Drawdown
Turn your wealth into sustainable spending
Fowler Drew’s bespoke drawdown strategies ensure your hard-earned wealth supports the life you envision, transforming your capital into reliable, sustainable income.
Client-Centric Spending Focus
We shift the conversation from abstract investment returns to real-world spending power, ensuring financial planning is relatable and meaningful. This approach empowers you to focus on what truly matters: your lifestyle and goals.
Dynamic Multi-Goal Optimisation
Life isn’t one-dimensional. Our strategies adapt to your evolving priorities, whether raising a family, managing unforeseen expenses, or enjoying a secure retirement. We allocate resources efficiently across various time horizons to meet your needs.
Integrated Tax and Inflation Management
By incorporating tax considerations and inflation effects, we provide accurate, long-term planning solutions. Our goal is to maximise your after-tax spending power while safeguarding your financial future.
Probabilistic Outcome Visualisation
We utilise advanced modelling to help you understand potential future scenarios, fostering informed decision-making and giving you confidence in your drawdown strategy.
Understanding Spending Needs
What is Drawdown?
Applying Drawdown Principles
Key Considerations in Drawdown
An Example of a Drawdown Plan
Our Approach
Why Choose Fowler Drew
Understanding spending needs
What is Drawdown?
Drawdown is the process of transforming your capital—whether from pensions or other sources—into a steady stream of income to support your lifestyle. Think of it as turning your wealth into reliable spending power.
The journey starts with saving and investing, where savings grow into capital. During drawdown, this capital is strategically managed to generate income while remaining invested. The returns—through capital gains and income—fuel your spending plan, ensuring you can enjoy life while potentially enhancing future financial security.
While retirement is a common drawdown scenario, it applies to various life situations, such as living off a divorce settlement or injury payout. At Fowler Drew, we integrate guaranteed income sources like pensions, account for multiple time horizons, and provide holistic guidance to ensure your resources support the life you envision.
The journey starts with saving and investing, where savings grow into capital. During drawdown, this capital is strategically managed to generate income while remaining invested. The returns—through capital gains and income—fuel your spending plan, ensuring you can enjoy life while potentially enhancing future financial security.
While retirement is a common drawdown scenario, it applies to various life situations, such as living off a divorce settlement or injury payout. At Fowler Drew, we integrate guaranteed income sources like pensions, account for multiple time horizons, and provide holistic guidance to ensure your resources support the life you envision.
Applying drawdown principles
In a drawdown plan, spending is the output of the plan in which resources assigned to it are at work in financial markets earning a return that has the potential to boost deferred spending. Though retirement provision is the most common type of drawdown plan, the principles apply equally well to other types of spending goal funded by a capital sum:
- Living off settlements from divorce or injury
- Integrating pension transfers into a comprehensive spending plan
Key considerations to your drawdown plan
- Cash Flow: Drawdown focuses on after-tax cash flows, which vary depending on income sources (e.g., pensions, ISAs, taxable accounts).
- Holistic Approach: A robust plan integrates all income sources, including guaranteed ones like state pensions or defined benefit schemes.
- Time Horizons: Different goals require tailored strategies based on varying timeframes.
- Constraints: Effective planning considers how long capital must last and acceptable drawdown rates.
- Real Terms: Inflation and investment performance are accounted for to ensure outcomes are realistic and sustainable.
- Probability and Risk: Probabilistic modelling combines real returns with withdrawal rates, helping you visualise potential outcomes and make informed decisions.
By focusing on total spending rather than just potential investment returns, you gain a clearer understanding of your financial future and greater confidence in your drawdown strategy.
Let's look at an example of a drawdown plan
Let’s take James and Samantha as an example. Approaching retirement with two adult children, they have:
- A small final-salary pension
- Two state pensions
- Personal savings
Precision in achieving your goals
They want to know:
- If they have enough to retire as planned
- How much they can safely spend
- When they can make gifts to their children
- How to handle decisions that can’t be made now
Our collaborative planning process addressed these needs with specific, measurable outcomes detailed below:
- Spending safely: They knew what their safe spending levels across their lifetime looked like.
- Avoiding shortfalls: They knew what their minimum spending levels must be at different stages.
- Prioritising goals: Valuing higher spending early in retirement to take advantage of their good health.
- Managing risk: Balancing risk to avoid excessive volatility not required to meet their minimum spending.
Given the resources available, the ‘right’ risk approach was the one that generated the level and time profile of minimum spending (at 95% confidence), shown below as the top of the green bars, with upside for either their own spending or gifting to their children represented by the orange and red bars.
This risk approach would carry with it, early in the plan, a level of short-term volatility from the assets assigned to the drawdown goal they felt was no higher than they were used to. But portfolio volatility would also tend to decline over time as the remaining time horizons shortened, the risk exposures reducing through time. They reduce because an unchanged level of risk would otherwise lead to a breach of the minimum spending constraint, the range of possible outcomes being partly dependent on time. This dynamic risk profile was illustrated graphically as the changing average for the remaining plan duration.
Our Approach
1
Comprehensive Goal Setting
Your financial journey should reflect your values, ambitions, and the people who matter most to you. Imagine the benefits you want your money to provide at every stage of life—whether it's securing a comfortable retirement, funding your children's education, or supporting causes close to your heart. Our team of experts, supported by our advanced systems, helps you transform these aspirations into clearly defined goals.
Using sophisticated probabilistic modelling, we identify the optimal combination of resources, time, risk, and outcomes that will bring you the greatest satisfaction. This isn't about us deciding what's "suitable" for you; it's a collaborative process where you explore the consequences of different scenarios and express your preferences.
Once these variables are tailored to your unique needs, they guide the design and management of your goal-based portfolios.
2
Customised Investment Implementation
We establish a cost-effective network of third-party custody and dealing arrangements tailored to each individual contributing to your financial goals. Whether it's pensions, ISAs, JISAs or trusts, we ensure that all resources are strategically aligned.
3
Continuous Portfolio Management
As life unfolds and your personal circumstances evolve, so too should your investment portfolio. We understand that changing goal horizons and ambitions require a dynamic approach to ensure your financial plans remain on track. This is why we embrace Controlled Outcomes Investing—a process that transforms investment management into an ongoing journey of financial planning.
Why choose Fowler Drew for your retirement planning?
With over two decades of experience, we specialise in helping clients turn their accumulated wealth into practical, sustainable income streams. Our approach is rooted in advanced financial modelling, tailored to your unique circumstances and designed to provide clarity and confidence in your financial future.
Our People
Meet our team
Testimonials
What our clients have to say
"You demonstrated we had a genuine surplus, giving us the confidence to spend. That foresight set you apart from typical financial advisers."
"Your low-cost ETF philosophy and focus on outcomes, not stock picking, have made a big difference. It's a refreshing approach to investing."
"Trusted for integrity, honesty, and peace of mind. Advice is clear, client-focused, and easy to assess. Truly a cut above the rest."
“I have had a great experience with FD drew. Izzy was really supportive an...”
Carl
16,August
“I have had a great experience with FD drew. Izzy was really supportive an...”
Carl
16,August
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