The report – which surveyed 240 financial intermediaries and 500 private investors between June and July – found that 80% of IFAs and discretionary managers, along with six out of 10 clients, are sceptical on the sustainability of income above 4%.
However, 71% of those canvassed see funds offering income of 4% over base per annum regular monthly income as appealing, while around 50% believe multi-asset and multi-strategy vehicles have the best potential for sustainable income.
In addition, though 75% of intermediaries said that multi-strategy propositions are attractive, they view them as a less familiar option than multi-asset funds.
The findings represents a shift from pre-financial crisis sentiment, as Euan Munro, Aviva Investors CEO, explained.
“Before the global financial crisis, achieving a 5% target was not an unrealistic income goal,” he said. “Our research shows both advisers and investors recognise that this is not an obtainable level of return without jeopardising capital, and is unlikely to be sustainable.
“Traditional asset classes that once generated an attractive level of income are not yielding anywhere near to what investors require, and this is driving them to diversify their asset mix. Investors are increasingly seeking out multi-strategy funds as a result, and our research shows their popularity is set to increase.”
Furthermore, the report revealed that the post-pension changes landscape is proving a rockier one to negotiate than its pre-freedoms predecessor.
