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GBST develops investment pathways function

GBST develops investment pathways function

Tech firm GBST has added an investment pathways feature to its pensions platform to help providers prepare for the Financial Conduct Authority’s pathways legislation in August 2020.

GBST said its investment pathways functionality is expected to go live by the end of March and will allow providers to develop the best pathway design for their clients.

The feature will be available on GBST’s Composer platform which is aimed at both personal pension products, such as self-invested personal pensions, and workplace schemes.

The upgraded platform will allow clients to hold investments in more than one pathway as well as add or switch pathways as investment needs change nearer retirement.

It will also allow automatic switching into a chosen investment pathway when the saver decides to access their pension savings and has the option to allow transfers from other drawdown providers.

David Simpson, head of EMEA at GBST, said the early launch of the function would give providers enough time to prepare their own investment pathway proposals before the rules come into force.

Mr Simpson said: “Working in partnership with our clients, we were able to quickly identify suitable options following the announcement of the regulations, agree a consensus on the preferred design and deliver the functionality well before the new rules take effect to give providers time to prepare their own propositions.”

The FCA first proposed pension providers offer their non-advised drawdown customers a choice of investment pathways to meet their retirement objectives in January last year.

The regulator suggested four 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.

The pathways include an option for consumers who have no plans to touch their money in the next five years and for those who plan to use their money to set up a guaranteed income within the next five years.

The regulator also proposed an option for consumers who plan to start taking money as a long-term income within the next five years and those who plan to take out all their money within that time frame.

Defined contribution drawdown providers will have to offer non-advised consumers investment pathways from August 2020.

Rob DeDominicis, chief executive officer of GBST, said: “Our new investment pathways functionality links seamlessly with our existing leading-edge retirement options and capabilities, including hybrid retirement accounts and annuities. 

“Demand for enhanced pension functionality continues to grow, not only in the UK market, but also in Australia and the wider Asia-Pacific region where changing regulation and aging populations support increasing demand for greater certainty over retirement income. 

“We will work with clients to further develop our pension and investment propositions and meet the evolving needs of their customers.”

In July last year rival FNZ agreed to acquire GBST in a deal worth £220m, which would see two of the three major tech providers for UK adviser platforms join forces.