A new range of strategic asset allocations (SAAs), designed specifically to meet the needs of consumers in each of the four FCA Investment Pathways, has been launched by Hymans Robertson. The Investment Pathways SAAs will allow providers to offer investment strategies that will meet the requirements of the investment pathways and help ensure consumers are invested in a way that meets their needs.

The bespoke SAAs have been developed by the leading pensions and financial services consultancy using years of investment expertise across institutional and retail markets. They are designed to meet the specific objectives suitable for each of the four Investment Pathways and can be customised by providers to reflect their business and the profile of their customers.

Explaining the benefits of using the Strategic Asset Allocations for both providers and their customers, Paul Waters, Head of Strategic Digital Solutions, Hymans Robertson, says:

“Implementing the FCA’s mandatory Investment Pathways is a big task facing providers. These specially developed SAAs will provide a great foundation - off the shelf investment strategies with clearly defined risk profiles that can deliver good outcomes for customers.

“The SAAs have been devised with an understanding of the potential customer objectives for each pathway, using a combination of quant modelling and investment market insight to develop and test the SAA. Providers will be able to adopt the SAAs as they are, or they can be customised to reflect any specific characteristics of both their customers and the funds that they offer. Once the SAAs are set, we monitor the market environment and run forward looking projections each quarter via our proprietary stochastic model. We can then provide reporting which feeds into the provider’s governance body. We can then, if necessary, make adjustments to the SAAs to ensure they continue to meet the objectives and enable the best possible outcomes for the customer.

“Each of the SAAs provides a balance of growth and defensive assets, avoiding illiquid or esoteric asset classes on the whole, to make the investment process more straightforward while at the same time providing a balance of growth and protection for customers. These SAAs not only help providers with the implementation but give them reassurance that they are meeting the compliance requirements set out by the FCA.

“There are a large number of customers with medium sized pots who are approaching retirement and for whom financial advice is unaffordable or impractical. Investment Pathways offers a simple and low cost way for these customers to access an investment solution broadly suited for their retirement. Coupled with clear and straightforward communication it has an important place to play in the market for a customer segment who are too often left high and dry.”

The Strategic Asset Allocations are already developed and can be implemented straight away.