Countdown to Investment Pathways
15 Sep 2020
With less than 3 months to go, many firms will be grappling with the launch of the FCA’s Investment Pathways in Feb 2021. With the clock ticking, what should firms be doing now to ensure Investment Pathways are a success for your customers and business?
What will Investment Pathways mean?
For those who are not already aware, Investment Pathways is an initiative from the FCA which means pension providers must offer their non-advised customers who are going into drawdown a choice of four pathways to meet their retirement objectives.
The FCA proposed the pathways after it found many consumers were solely focused on taking tax-free cash from their pensions and were "insufficiently engaged" with deciding how to invest funds that moved into drawdown.
Making a success of Investment Pathways
While the headline requirements are prescriptive, within that there is considerable scope to move beyond just compliance and provide the ability for customers to make informed decisions they feel comfortable with. To achieve this, and create a more engaging journey, we believe the most successful solutions will include:
- Clearly defined investment solutions which customers can understand for each pathway
- A personalised view on each investment pathway option and what it will mean to a customer in terms of their own retirement income.
- Customer education and guidance around retirement income requirements and individual longevity forecasting.
Key to success for providers will be monitoring customer decisions and outcomes so that they can manage conduct risk. To do this, providers will need solutions that provide robust and insightful management information for their governance bodies.
How we can help you
We are already working with several providers as they get ready for Investment Pathways. Using our market leading Guided Outcomes for Investment Pathways tool, we can help you:
- Tailor our pathways strategic asset allocations to meet your customer profile
- Configure our pathways tool to maximise customer engagement and value
- Capture data and track engagement to support good governance and manage risk
We would be delighted to meet with you and discuss how to ensure Investment Pathways is a success for your business.