Novia's Copia DFM launches iShares portfolio range for 'decumulating' clients

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Copia Capital Management, the discretionary fund management division of the Bath-based UK and international platform services provider Novia Financial, has unveiled a new range of managed portfolios that it says have been designed specifically to accommodate people who are at the “decumulation phase” of their investment lives. 

The new Copia Retirement Income range makes use of  BlackRock iShares exchange traded funds (ETFs) to achieve the precise results that investors in their  “decumulation” years – otherwise known as retirement years – need, Copia Capital Management head Henry Cobbe says.

He says Copia will  deliver these results to decumulation-phase investors by creating five risk profiles and four time horizon ranges, which are designed to enable advisers and wealth managers to choose a portfolio best suited to their individual client’s needs.

Copia literature, which may be viewed and downloaded from its website,  says its Retirement Income portfolios are designed to mitigate what is considered to be the key retirement risk for older investors – “shortfall risk”, which is better known to many retirees as “the risk that you’ll run out of money before you die”.

The four key drivers of shortfall risk, according to Copia, are “sequencing risk” – the risk of getting the wrong time horizons for a given asset allocation; longevity risk – the risk that a chosen rate of retirement pot withdrawal means the pot may not last the course, given the individual’s life expectancy; interest rate risk – the risk that interest rates might affect an investment if the investment term isn’t correctly chosen; and inflation risk – the risk that the portfolio might be caught out by inflation.

As part of its focus on this decumulating market segment, Copia has also published and developed a table of “Safe Withdrawal Rates” that it says “matches each asset allocation and investment term, which relates to life expectancy”.

For now the Retirement Income range is available only in a pounds sterling, but it’s availability on the Novia platform, and the fact that Copia has the facility to launch and run the range on any other platforms that provide access to ETFs, will make it of potential use to investors outside of the UK, the company says.

As reported,  Copia, which specialises in ETFs, marked its third anniversary in November. It was then that the company formally announced the appointment of Cobbe, an investment researcher and strategist whose previous 17 years of experience included stints at Schroders, Thames River Capital, Nevsky Capital and Elston Consulting. which develops investment strategies for index providers, asset managers and intermediaries.

‘Decumulation ≠ accumulation’

Cobbe, pictured left, stresses that for many advisers, the new Retirement Income range will be something of a revelation, because “decumulation is very different from accumulation”, a fact that until now, he notes, hasn’t always been widely appreciated.

At a recent presentation of the new range, Cobbe appeared with his shoes on backwards to emphasise this fact.

“It has different objectives, different risks and requires a different investment approach,” he adds.

“We don’t think it’s right to recycle old thinking into this new world. Only advisers know their clients’ retirement income needs and circumstances.

“Our Retirement Income range is purpose-built to give advisers a compliant investment solution that matches a ‘Safe Withdrawal Rate’, risk level and time horizon for each client.”

“Investing in retirement is like investing upside-down,” added Andrew Storey, sales director at EValue, a UK-based fintech consultancy.

“You are not putting money in, you are taking money out. And taking too much out too early creates a big problem. So managing the key retirement risks is essential.”

The Novia team is headed up by Novia Financial chief executive Bill Vasilieff, the former sales and marketing director and co-founder of Selestia, another UK platform operator, which was ultimately acquired integrated into Skandia’s platform operation in 2006.

Novia launched its international operation, Novia Global, in 2015, to provide a comprehensive wealth management service, or “full wrap platform”, to investment advisers and their clients in the international market.

Last year, as reported, Novia Global  established a sales office in Dubai through the offices of PWS Group, a Dubai-based advisory firm also known as Prestige Wealth Solutions. Although Novia is based in Bath, Copia recently opened an office on Brook Street in Mayfair.