Hymans Robertson has launched Guided Outcomes (GO) for Investment Pathways - new technology designed to enable pension providers to personalise how they present the FCA Investment Pathway choices to customers.  The leading pensions and financial services consultancy’s technology gives consumers an immediate view of their potential retirement income with each of the four pathways to allow them to make the most appropriate choice. 

GO for Investment Pathways is an API tool that can be used by providers to give a more powerful and in depth offer to customers, enabling them to build and tailor their own customer experience.  Customers can see what each investment pathway option would mean to them in terms of their own retirement income, with personalised longevity forecast and guidance on sustainable drawdown rates enabling them to make more effective decisions, based on their own circumstance.

The technology includes modelling and calculations to allow the customer to see the impact of different decisions within each pathway, for example the benefit of investing for longer or the tax cost of a more rapid withdrawal approach.  This in turn means the provider can help the customer fully understand the implications of the pathway that they’ve chosen based on what they actually plan to do with that pot.

Commenting on the need for Providers to adopt such techniques in delivering the FCA’s Investment Pathways, Paul Waters, Head of Strategic Digital Solutions, says:

“As Providers prepare to implement the FCA’s Investment Pathways for pension decumulation later this year, it is essential they have the right technology in place to guide consumers to choose the best investment route for their own needs. 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, and manage the risk to providers.”

Explaining the development of GO for Investment Pathways, Paul says:

“We based our approach for pathways using the many years of experience and understanding we’ve built up through the use of our highly successful Guided Outcomes (GO) model for engaging consumers with financial decisions.  Over the last four years GO has been used across the Workplace Pension and Retail Financial Services market by over 50 organisations reaching around one million individuals. 

“The combination of our unique data sets and personalised modelling is proven in making complex financial matters easy for the individual to understand , so they can make appropriate decisions on which actions to take. These modelling principles have been used in the same way to develop this personalised capability at the decumulation stage, for example combining the individuals potential longevity with their investment strategy to give affordable withdrawal rates.”

Paul continues to explain why personalising investment pathway choices will be vital for Providers:

“Providers who can show that they can give consumers the clearest information about the options they face about drawdown at the point of retirement are going to be the ones who retain the most customers, as well as their assets. It will be vital to have the technology in place to provide consumers with clarity about the pathways.  Customers will be increasingly reaching this point with multiple pension pots that they want to merge and those providers who make that straightforward will be the ones that benefit.  If they don’t, others will be attracting their customers and that consolidation.”

GO modelling for Investment Pathways can be available to the provider within days once a decision is made to implement the approach.