Tackling Consumer Duty in Decumulation: A Practical Guide for Retirement Advisers (and why protection matters)

Decumulation is where retirement planning becomes real. The salary from a job stops (or reduces), spending becomes more visible, and the risks become more asymmetric: a poor early sequence of returns, an unexpected care need, or a tax change can permanently alter a client’s standard of living. The FCA has been explicit that the shift from accumulation to decumulation is “more complex with the potential for more risk”, and that advisers play a key role in guiding consumers through these decisions.

At the same time, Consumer Duty raises the bar: firms must act to deliver good outcomes for retail customers, with expectations that apply across four outcomes (products & services, price & value, consumer understanding, consumer support).

This article sets out a practical, adviser‑friendly approach to meeting Consumer Duty requirements specifically for retirement decumulation, and highlights how Hilbert Protect 90 - with its 90% protection barrier - can help advisers build resilient retirement portfolios designed for sustainable income and reduced downside risk.

> Read our Consumer Duty explainer here; Firms set to put customer needs first thanks to new Consumer Duty regulation

Why decumulation is the Consumer Duty “stress test”

In accumulation, time and new contributions can help smooth market volatility. In decumulation, withdrawals can lock in losses, turning normal volatility into foreseeable harm if income sustainability, capacity for loss and sequencing risk aren’t properly assessed and evidenced. The FCA’s retirement income thematic work emphasises that consumers now face greater complexity and risk, including the reality that many retirement income solutions leave consumers exposed to ongoing investment risk.

The FCA has also published practical “good practice and areas for improvement” guidance, identifying three fundamentals for good outcomes in decumulation:

• Information collection and record keeping
• Appropriate risk profiling
• Sustainable income withdrawals

Those three fundamentals map neatly to Consumer Duty, because they directly affect whether clients receive suitable advice, understand it, and are supported over time.

Regulatory Insight: What the FCA Is Really Saying on Retirement

Speaking to George Ladds Founder of the Money Wise UK consultancy and podcast host he explains how the FCA’s retirement income thematic review, supported by its Dear CEO correspondence and wider Consumer Duty guidance, makes one point increasingly clear: decumulation requires a different advisory framework from accumulation.

He summarised; “The regulator highlights that retirement income decisions are inherently more complex and expose consumers to asymmetric risks, particularly sequencing risk, sustainability of withdrawals, and behavioural responses during market stress. As a result, firms are expected to demonstrate that they have clear, structured retirement propositions that are distinct from accumulation-led advice.”

This creates a recurring theme within the FCA’s findings for firms to manage potential conflicts of interest, notably between drawdown and annuity solutions. The FCA expects advisers to evidence that recommendations are driven by client outcomes and needs, rather than default preferences or commercial incentives.

George adds; “The review also raises concerns that many firms continue to rely on accumulation-focused risk profiling tools when advising in decumulation. The FCA’s expectation is that firms adapt their approach to reflect income sustainability, capacity for loss in income terms, and the real-world impact of withdrawals during market downturns.”

Taken together, the regulatory direction points towards the importance of a Centralised Retirement Proposition (CRP) that defines process, governance, and decision-making,not simply a range of products, and that can be consistently applied, monitored, and evidenced over time.

George summarises the FCA’s regulatory insight as; “With more retirement solutions coming to market, the real risk is jumping to the solution before the foundations are in place.”

A Consumer Duty framework for decumulation advice

So, how can Advisors adjust their mindset and processes to better serve their customers who are in or approaching decumulation, guided by and adhering to the Consumer Duty framework? We believe there are four key pillars that need review and

1) Products & Services: define the retirement “job to be done”

To comply and reflect the spirit of the Consumer Duty guidance, firms should ensure products and services meet the needs of the target market and perform as clients would reasonably expect.
In decumulation, the “job” is rarely just “growth”. It’s typically a combination of:

• Sustainable withdrawals (income that can adapt to markets and spending shocks)
• Capital preservation / drawdown control (to reduce sequencing risk and prevent forced selling)
• Flexibility (variable spend, tax planning, phased retirement)
• Legacy outcomes (inheritance preferences, beneficiary planning, gifting)

What “good” looks like in practice: build a clear retirement income proposition (often a centralised retirement proposition or CRP) where each solution has a defined role e.g., “essential income”, “discretionary spending” and “legacy”. The FCA’s thematic review examines how firms structure retirement propositions and evidence that they meet decumulation needs.

2) Price and Value: show the “value for outcomes”, not just cost

Consumer Duty is not “cheapest wins”. It’s whether total costs are reasonable relative to benefits and outcomes.
Decumulation is a natural place to articulate value, because outcomes matter more than ever:

Questions advisers and their investors need to consider include;

1. What is the cost of a major drawdown early in retirement?
2. What is the behavioural value of helping clients stay invested with clearer guardrails?
3. What is the operational value of a solution that is daily liquid and easy to monitor?

This is where solutions with explicit protection can be easier to defend under a “value” lens, provided you document the target market, explain limitations, and monitor outcomes.

3) Consumer Understanding: turn complexity into clear client decisions

The Duty’s “consumer understanding” outcome expects communications that equip clients to make effective decisions.
Decumulation conversations can overwhelm clients because they combine investments, tax, longevity, property decisions and family dynamics. The FCA specifically flags problems when decumulation risk questionnaires and processes are still “accumulation‑specific”, which can mis‑profile clients.

Practical steps advisers can adopt:

1. Re‑underwrite risk in decumulation: refresh attitude to risk and capacity for loss at retirement, not just periodically.
2. Explain sequencing risk with scenarios: show how early losses plus withdrawals change longevity of funds (and how guardrails help). The FCA’s retirement guidance is clear that sustainability of withdrawals is central to good outcomes.
3. Use “income policy statements”: define withdrawal rules, rebalancing triggers, and what happens in adverse markets—so clients understand what will change and why.

> For an adviser‑oriented explanation of adding explicit protection alongside ETFs (useful for client-friendly framing), see: Beyond ETFs: How IFAs Can Enhance Client Portfolios with Explicit Protection

4) Consumer Support: design the ongoing service for real retirement life

As advisory firms consider alignment with Consumer Duty, they need to master providing support that meets customer needs throughout the lifecycle of the product/service.
In decumulation, the service model matters as much as the asset allocation, because the client’s life is changing:

1. Spending often varies: “go-go” years then “slow-go”, then possibly “no-go” (care costs)
2. Housing decisions occur: downsizing, equity release considerations, gifting
3. Family priorities evolve: legacy goals, intergenerational support

The FCA guidance highlights that record keeping and fact finding must properly capture retirement liabilities, income sources and expected expenditure – this is especially important as missing or contradictory information can undermine suitability.

Operationally, advisers can strengthen support by using platforms that make monitoring, documentation, and client visibility easier. Hilbert’s Infinity platformis positioned as a 24/7 account and plan management system for advisers and clients, supporting easy product applications, valuation access and downloading of statements.

> Learn more about Hilbert’s UK offering and Infinity-led experience here: Hilbert Investment Solutions UK

The decumulation checklist: what to evidence under Consumer Duty

Below is a practical “file-ready” checklist aligned to FCA expectations and the Duty’s outcomes:

A) Fact find and retirement cashflow (evidence)

1. Current and future income sources (State Pension, DB, annuity, rental, part-time work)
2. Essential vs discretionary spending (and expected changes)
3. Known upcoming “lumps”: home repairs, gifting, care contingency
4. Tax wrappers and withdrawal order assumptions (and review triggers)

B) Risk profiling for decumulation (evidence)

1. Updated attitude to risk (not just historic)
2. Capacity for loss expressed in “income terms” (how much income reduction is tolerable?)
3. Sequencing risk mitigation plan (guardrails, cash reserve, protection features)

C) Withdrawal sustainability (evidence)

1. Target withdrawal rate range and dynamic adjustments in poor markets
2. Rebalancing policy and review cadence
3. Contingency plan for extended bear markets (temporary reductions, alternative income, ring-fencing essentials)

D) Consumer understanding (evidence)

1. A one-page explanation of “what happens if markets fall?”
2. A clear summary of product mechanics, including limitations of any protection/barriers
3. Confirmation the client can explain back key risks and trade-offs (documented)

Where Hilbert Protect 90 fits: protection with participation

For many decumulation clients, the most damaging scenario is needing to sell risk assets after a drawdown to fund spending. That’s why explicit risk guardrails can be so valuable, especially when they’re designed for the retirement journey.

Hilbert Protect 90 in brief (for advisers)

Hilbert Protect 90 is positioned as a retirement solution available in ISAs and SIPPs, designed to support investors’ needs for security and growth through the retirement journey.

Key features include:

1. 90% capital protection through a protection barrier that is present daily
2. Protection delivered via an insurance-backed commitment from the Munich Re group
3. A basket of ETFs used to generate market returns, with protection designed to increase as markets rise
4. No fixed term and daily liquidity
5. Oversight via a Quarterly Risk and Performance Review process described by Hilbert

> Read more about our use of EFTs in our recent article; Beyond ETFs: How IFAs Can Enhance Client Portfolios with Explicit Protection

Why this can support Consumer Duty in decumulation

Used appropriately within a documented retirement proposition, Hilbert Protect 90 can help advisers evidence:

• Foreseeable harm mitigation: explicit guardrails can reduce the impact of severe drawdowns during withdrawals (sequencing risk), supporting the FCA focus on sustainable income outcomes.
• Consumer understanding: a clearly described protection mechanism can be easier for clients to grasp than complex multi-asset drawdown dynamics, provided advisers explain exactly what the protection does and does not do.
• Ongoing support: daily valuation and defined review points can help create a repeatable monitoring rhythm aligned to retirement reviews.

> Read more about Hilbert Protect 90 in our recent article; Innovation and Protection: The Next Step in Retirement Investing

Important adviser note: All investments carry risk and suitability must be assessed. Hilbert Protect 90 is available via financial advisers and includes risk considerations.

FAQ: Consumer Duty and decumulation

1) What does the FCA expect advisers to focus on in retirement income advice?

The FCA highlights three fundamentals: information collection/record keeping, risk profiling, and income sustainability for withdrawals.

2) Why is decumulation treated differently from accumulation?

The FCA notes the move into decumulation is more complex and carries more risk, because consumers must decide how to fund retirement and manage invested solutions while taking income.

3) How does Consumer Duty change the way advisers should document retirement advice?

Consumer Duty requires firms to deliver and evidence good outcomes across products/services, price/value, understanding, and support. This means documentation of suitability, communications clarity, and ongoing monitoring are more important.

4) What’s a practical way to evidence “consumer understanding” in drawdown?

Use plain-English summaries, scenario testing, and documented client “teach-back” (clients explaining key risks/decisions). The Duty’s consumer understanding outcome is designed to ensure communications enable effective decisions.

5) What is Hilbert Protect 90’s “90% protection barrier”?

Hilbert Protect 90 uses ETFs for market exposure alongside 90% capital protection, with the level of protection increasing as markets rise, backed by an insurance-backed commitment from the Munich Re group.

6) Is Protect 90 fixed term, and what is the liquidity?

Hilbert Protect 90 has no fixed term and offers daily liquidity.

7) How can protection solutions help with Consumer Duty in decumulation?

Where suitable, explicit protection can help reduce foreseeable harm from large drawdowns during withdrawals (sequencing risk), aligning with FCA focus on sustainable income outcomes and clearer risk framing, provided limitations and suitability are clearly documented.

Closing thought: decumulation is where advice earns its keep

Decumulation isn’t just “accumulation in reverse”. It’s risk management, lifestyle planning, tax coordination and family outcomes, under a higher standard of regulatory accountability. The good news is that the FCA has made its expectations clearer, and firms that adopt a repeatable, evidence-led decumulation process are well positioned to demonstrate good outcomes under Consumer Duty.

If you want a retirement solution built to support this reality, where growth still matters and drawdown damage is mitigated, Hilbert Protect 90 offers a clearly articulated structure combining ETF participation with a 90% protection barrier designed for the retirement journey.

Who is Money Wise UK?

Money Wise UK is a consultancy run by George Ladds, working with a small number of financial planning firms across the UK. Alongside consultancy work, Money Wise UK has a strong focus on financial education, providing free, practical resources that people can download from the website.

Money Wise UK has also trademarked the Centralised Retirement Proposition®, not as a product, but as a way of sparking debate and encouraging firms to strengthen the foundations of retirement planning in a part of the market that is only set to grow. George is also the author of Money and Meaning, a book that explores our relationship with money from a practical and human perspective.