"Walk this way?" What will Investment Pathways mean for consumers and advisers?

Investment Pathways were finally launched with effect from 1 February 2021, having been delayed from their original launch date of 1 August 2020 due to the coronavirus pandemic.

Investment Pathways have been developed by the Financial Conduct Authority (FCA), as part of their ‘Retirement Outcomes Review’ project, which commenced in 2016 in the wake of the ‘Pension Freedoms’ that were introduced with effect from 6 April 2015.

Together with warnings about holding too much cash within an underlying investment portfolio, Investment Pathways represent the FCA’s solution to combatting potential financial ‘harms’ that could otherwise be experienced by individual consumers who elect to go into Flexi-Access Drawdown with their Defined Contribution (DC) pension funds from age 55 onwards, on a ‘non-advised’ basis.

Now that the Pathways have had a number of weeks to ‘bed in’, we provide an initial overview of what Investment Pathways are and how they work, before addressing their implications for both consumers and advisers.