Guide your clients on their incomeIQ journey

Nobody knows quite what the future holds. Changing life plans and priorities will mean your clients encounter varying income needs and goals throughout their lives and when investing, certain innate behavioural traits will influence their decision-making.

Schroders incomeIQ is a knowledge centre with guides, tips and tools to help you address these issues with your clients and encourage them to make more informed decisions to meet their income needs effectively. We have developed the incomeIQ test which will reveal your clients’ behavioural biases and provide useful tips to empower them to make better investment decisions.

Help your clients become empowered investors today and find out how Schroders incomeIQ can support you to achieve their income goals.

Explore your clients' income goals

What would your clients like to achieve in life, both personally and financially? Do they fully understand their own income needs, both now and in the future? Guide them using the resources below to help answer these questions and develop their income plan.

What kind of income investor is your client?

Planning your clients’ income needs isn’t all about the numbers – it will take into account their current circumstances as well as establishing a realistic view of how they want to live in the future. There are a number of points in someone’s life when income-producing investments might come in handy; whether to pay for school or university fees, a lifestyle change such as setting up your own business, or as supplemental income to earnings when approaching or throughout retirement.

Making use of income investing requires a thorough and honest understanding of what your client wants to achieve, both personally and financially, and the level of risk they are prepared to take.

This section identifies four broad life stages with commonly associated income needs and goals, as well as attitudes to risk which you can use to advise your clients.

  • Funding futures

    Have you considered how an income could help you pay for the costs of raising a family? Many parents expect to have to help their children with university costs or buying a home. Favouring investments with the potential for growth and flexibility to provide income can be an effective strategy for saving for such events.

    Are you saving for a specific goal, such as a deposit on a new home? Income earned on savings can be reinvested, and the accumulation of dividends over the long term should boost total returns.

    Why should you start planning for your future now? Retirement might seem like a long way off if you are in your early 20s, but the sooner you plan for it financially, the less you are likely to have to put aside. Planning for your financial future early in your working life will allow you to make longer-term and potentially more rewarding investments.

    If you are this kind of income investor, your typical income goals and attitudes to risk are:

    INCOME GOALS

    • School fees
    • University fees
    • Retirement
    • Help child onto property ladder
    • Career change
    • Business start-up

     

    ATTITUDE TO RISK

    • Focus on long-term investments with the ability to accept a higher level of risk
    • May be able to make additional investments as finances allow
  • Finding freedom

    Are you ready to start a new venture? You’ve spent years working and you’d like to start out on your own. Once you’ve accumulated a decent pot of capital, an income investment can help provide a regular income.

    Do you have a realistic view of your future income needs? According to European Commission data, people over 65 across Europe have an average income of 89% of that of the rest of the population, but since the latter group includes people of non-working age the actual percentage of average income for people in retirement is much lower.

    If you are this kind of income investor, your typical income goals and attitudes to risk are:

    INCOME GOALS

    • Retirement lifestyle
    • New hobbies
    • Travel
    • Living abroad

     

    ATTITUDE TO RISK

    • Focus on medium to high risk but with an eye on de-risking
    • Looking to generate income without excessive capital risk
  • Retirement ready

    Have you considered all the potential costs of your new lifestyle? People often find their expenses fall once their working life ends, but don’t automatically assume that all your expenses will go down – some may increase, such as heating and leisure costs.

    Do you plan to make further changes? If you have identified more than one main retirement goal, it’s worth considering the level of risk you are prepared to take and the income you need to support each goal. Would you be prepared to accept a higher level of risk for the proportion of your capital that is earmarked for funding a new hobby, for example?

    If you are this kind of income investor, your typical income goals and attitudes to risk are:

    INCOME GOALS

    • Retirement lifestyle
    • Travel
    • Living abroad

    ATTITUDE TO RISK

    • Typically, focus is on medium-risk investments
    • Need to avoid significant drawdown on capital
  • Careful comfort

    How long does your retirement income need to last? As people are living longer, their income needs are higher than in the past. ONS data suggests that in the UK, 1 in 3 babies born today are expected to celebrate their 100th birthday. While it’s difficult to put a number on how much you’ll need, a well-structured income plan can help fulfil requirements over the long term.

    Are you likely to face additional healthcare costs? Over the coming decades, many more people will require some form of part- or full-time care during retirement as life expectancy continues to rise.

    Are you thinking about providing for future generations? Leaving a legacy is not an exact science. However, adopting a balanced approach to financial planning throughout retirement could increase the chance of having something to leave behind.

    If you are this kind of income investor, your typical income goals and attitudes to risk are:

    INCOME GOALS

    • Estate planning
    • Additional healthcare costs
    • Full or part-time care

     

    ATTITUDE TO RISK

    • Focus on shorter, lower-risk investments

Take the incomeIQ test

Learn more about behavioural biases

 

Schroders' income solutions

Schroders is well positioned to help you deliver your clients’ income goals through our range of income solutions across equities, fixed income and multi-asset. For more detailed information on our funds, including price, performance and fund literature, simply click on the relevant tab or contact us here.

Schroder ISF Global Dividend Maximiser

Equity maximisers

Schroder ISF Global Dividend Maximiser

Benefit from income enhancement and capital growth opportunities through investment in global equities

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FUND INFORMATION

Schroder ISF Global Multi-Asset Income

Multi-Asset

Schroder ISF Global Multi-Asset Income

A complete income solution investing in the best opportunities across a variety of asset classes worldwide

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FUND INFORMATION

Try our income calculator to build a sample portfolio of our funds and see a historic breakdown of the income it could have delivered. Some of the funds mentioned here may not be available for distribution in your jurisdiction. Please contact your local Schroders office for further information.

Explore the incomeIQ site and build your clients’ income profile by uncovering their behavioural biases and analysing what type of income investor they are.

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