For three decades, William Bengen’s 4% rule has shaped how advisers and retirees think about sustainable withdrawals. Originally published in 1994, the rule suggested that a retiree could withdraw 4% of their portfolio in the first year (gross of fees), increase that amount with inflation, and reasonably expect their funds to last 30 years. But does that guidance still hold in 2026? Recent research and Bengen himself suggest it may no longer be the optimal starting point.
Article last updated 26 June 2026.
In recent years, the Financial Conduct Authority (FCA) has placed increasing focus on the quality of retirement income advice, particularly how firms support clients transitioning from accumulation to decumulation.
Through its thematic work and expectations under Consumer Duty, the FCA has highlighted the need for firms to demonstrate clear, structured approaches to delivering sustainable retirement outcomes. This includes being able to evidence how income strategies are designed, monitored and adapted over time, and how risks such as sequencing, longevity and inflation are managed in practice.
As adviser firms continue to professionalise their advice processes and respond to increasing regulatory scrutiny, the use of centralised propositions has become standard practice. While most firms now operate a Centralised Investment Proposition (CIP), research suggests that only 56% of firms have formally adopted a Centralised Retirement Proposition (CRP) despite a much higher proportion already delivering consistent retirement advice.
While a CIP and CRP are closely linked, they serve distinct purposes. They apply at different stages of a client’s journey and address different regulatory risks. Understanding the difference between them is critical for effective advice delivery, good outcomes under Consumer Duty, and robust due diligence.
What is a Centralised Investment Proposition (CIP)?
A Centralised Investment Proposition sets out how an adviser firm selects, manages, and monitors investments for clients throughout the accumulation phase of their financial journey.
At its core, a CIP provides a consistent framework for:
- Investment philosophy and beliefs
- Risk profiling and asset allocation
- Product selection (e.g. MPS, funds, platforms)
- Ongoing governance, monitoring, and review
The CIP is primarily designed to ensure that clients with similar objectives and risk profiles are treated consistently, while still allowing advisers to personalise advice around individual needs.
Key characteristics of a CIP
- Focused on growth and accumulation
- Typically aligned to risk‑rated portfolios
- Designed to be scalable and repeatable
- Strong emphasis on investment governance and oversight
- Well established across most advised firms
In regulatory terms, the CIP has historically been central to demonstrating suitability, consistency, and value for money across an adviser’s investment advice process.
What is a Centralised Retirement Proposition (CRP)?
A Centralised Retirement Proposition focuses on clients who are approaching, at, or in retirement, where the nature of risk shifts from simply achieving returns to managing sustainability and income certainty.
Rather than replacing the CIP, a CRP builds on it, addressing the additional complexities that arise when clients begin to draw an income from their assets.
A CRP typically provides a framework for:
- Income planning and withdrawal strategies
- Sustainability of income over time
- Managing sequencing risk
- Longevity and inflation risk
- Tax efficiency and cashflow planning
- Governance of retirement‑specific solutions
Key characteristics of a CRP
- Focused on decumulation and income
- Concerned with outcomes, not just performance
- Explicitly addresses multiple retirement risks
- Requires ongoing monitoring and adjustment
- Increasingly scrutinised under Consumer Duty
Where a CIP asks, “How should we invest?”, a CRP asks, “How does this portfolio support a client’s retirement objectives over time?”
