Introducing Investment Pathways
Investment pathways are a new initiative from the FCA (from 1 February 2021) aimed at providing customers who are not receiving a personal recommendation with better retirement outcomes when:
- moving all or part of their pension savings into drawdown
- transferring funds already in drawdown into a new drawdown arrangement
We will always seek to refer a client to their adviser where we hold that information on our file.
Adviser firms are now asked to consider available pathway solutions when assessing suitability for clients who are deciding how to invest drawdown funds.
Investment pathways have been introduced by the FCA for non-advised clients, but they have amended their guidance on assessing suitability under COBS 9.3.3A to include that
‘when a firm is making a personal recommendation to a retail client about the investment of funds in the client’s capped drawdown pension fund or flexi-access drawdown pension fund its suitability assessment under COBS 9.2.1R(1)(a) should include consideration of pathway investments.’
To support you with your consideration of our investment pathways for your advised clients we have produced a guide for clients explaining our risk mapping process, asset allocation model and review procedure for the 4 pathways.
For more help and guidance, here’s Andy Nash, Pensions Business development Manager to explain more
Guidance under COBs rules coming into place on 1st February means that advisers should consider the providers relevant investment pathway when making a recommendation.
Our Investment Pathway choices
We’ve created four new investment pathway choices, available to advised and non-advised customers on our Retirement Account.
These are detailed in the table below:
|Client objective||Investment Pathway solution||Where it invests|
|I have no plan to touch my money in the next 5 years||
Investment Pathway 1
|PruFund Risk Managed 3 Fund|
|I plan to set up a guaranteed income (annuity) within the next 5 years||Investment Pathway 2||M&G Corporate Bond Fund|
|I plan to start taking long-term income in the next 5 years||Investment Pathway 3||PruFund Risk Managed 2 Fund|
|I plan to take my money in the next 5 years||Investment Pathway 4||
Legal and General Cash Trust
PruFund Risk Managed 1 Fund
The value of your client’s investment can go down as well as up. They may not get back what they have paid in.
Learn about our Retirement Account
The Retirement Account offers a wide range of investment choices to help your client save and invest for their retirement in a tax efficient manner.