Morningstar's new dynamic decumulation tool for advisers

By Penny Pryor

Morningstar has launched a new dynamic decumulation tool for advisers to help them discuss different retirement scenarios with their clients.

Morningstar says the tool goes further than current retirement calculators on the market and has utilised rigorous research and behaviour science methodologies to include more inputs. It is also adaptive to market conditions and can be tailored to an individual's unique circumstances.

It splits investments into growth and defensive pools to help investors find out what mix of each they need to achieve their retirement goals. It also uses a 'bucket approach' with different buckets for the short, medium and longer term.

In a webinar to advisers explaining the product, Morningstar head of decision science, Ryan Murphy, said that the tool was useful for getting the discussion started with clients and that the interface was also designed to be interactive and easy to understand for clients.

In some cases, investors may not be able to reach their desired income with their desired level of risk and Murphy said the tool should assist advisers in explaining those difficult choices to investors.