Sparrows Capital and Just Group have partnered to launch a retirement income solution, SCore-D, to help advisers navigate the financial risks their individual clients may face in decumulation.

Many retirement plans rely on market portfolios to generate income during decumulation. This exposes them to market risk and to sequence of return risk – the danger that market downturns during the early withdrawal phase may harm client outcomes.

Together with Just, Sparrows has modelled the effects of combining market portfolios with a guaranteed income producing asset. This analysis shows that the combination can reduce sequence risk while allowing continued exposure to markets, and that this approach can increase the sustainability of income while still
allowing clients to access potential market growth.

SCore-D provides an innovative framework for advisers to allocate to Just’s guaranteed income producing asset alongside Sparrows’ award-winning capped-fee SCore MPS portfolios within SIPP wrappers on platform. The combined portfolios are intended to maximise the potential investment benefits for clients while keeping
the risk of portfolio depletion within suggested limits.

Stuart Slegg, head of retail investment solutions at Just Group, said: “This is a very exciting venture for Just as we continue to focus on disrupting the market to improve customer outcomes. Just’s guaranteed income producing asset, delivered through our pioneering Secure Lifetime Income solution, combined with SCore’s investment ethos and proven capability, will offer customers innovative and unparalleled solutions to meet their retirement needs.”

John Bennett, head of adviser proposition at Sparrows Capital, said: “This game changing proposition addresses a dearth of safe solutions to the decumulation dilemma. It leverages the benefits of two excellent products to address the individual needs of end clients as they look to secure a sustainable income in retirement. SCore-D is an essential tool for advisers.”