Investments  

Hargreaves chooses Baillie Gifford for investment pathway

Hargreaves chooses Baillie Gifford for investment pathway

Baillie Gifford’s multi-asset income fund has been selected by Hargreaves Lansdown as an investment pathway solution.

The £82m portfolio, which aims to produce monthly income and maintain the value of that income and its capital in line with inflation over five-year periods, will be available as a pathway solution on the platform from today (January 27).

Jan Oliver, partner at Baillie Gifford, said: “Six years ago pension freedoms removed the need to purchase an annuity at 75, providing increased liberty and choice. 

“Investment pathways provides investors who may be daunted by this choice with assistance by aligning them with a solution suited to their financial goals.”

Ms Oliver said through Hargreaves’ solution, investors could access the fund and benefit from full access to their capital, while receiving an income favourable to annuity rates.

The Baillie Gifford multi-asset income fund has returned 5 per cent over the past year and currently yields at 3.3 per cent.

The pathways plan

Under the Financial Conduct Authority’s investment pathways rules, non-advised savers who enter drawdown or transfer funds to a new drawdown account will need to be offered ready-made investment pathways based on their answers to basic questions about how they plan to spend their retirement pot.

This will also be the case for advised clients if they are looking to change their investment decisions more than 12 months after the transaction they were advised on.

The proposed 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.

Other options, such as 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 the next five years, were also touted by the FCA.

Investment pathways were originally due to be introduced in August 2020 but as a result of Covid-19 the implementation date has been pushed back to next month.

There has been some scrutiny over the plans, primarily around a rise in consumers thinking they had been given advice or exhausting their pots prematurely leading to an increase in complaints. 

imogen.tew@ft.com

What do you think about the issues raised by this story? Email us on FTAletters@ft.com to let us know