• Home
  • Admin/Tech
  • Benefits
  • Buzz
  • DB
  • DC
  • Diversity
  • Investment
  • Law & regulation
  • Risk reduction
  • Events
  • Whitepapers
  • Spotlights
  • Digital Edition
  • PPTV
  • Newsletters
  • Sign in
  •  
      • Newsletters
      • Account details
      • Contact support
      • Sign out
     
    •  

      You are currently accessing ProfessionalPensions via your Enterprise account.

      If you already have an account please use the link below to sign in.

      If you have any problems with your access or would like to request an individual access account please contact our customer service team.

      Phone: +44 (0) 1858 438800

      Email: [email protected]

      • Sign in
  • Follow us
    • Twitter
    • LinkedIn
    • Newsletters
    • YouTube
  • Register
  • Subscribe
  • Events
    • Upcoming events
      event logo
      Webinar: Using passion for ESG to unleash member engagement

      This webinar will look at how pension schemes can harness their members’ interest in ESG to engage them more broadly with their pensions. In particular, it will look at exclusive research showing how members are reacting to ESG; their propensity to act versus their actual behaviour; and the expectations they have of providers in this regard.

      • Date: 26 Jan 2021
      • Webinar
      event logo
      Investment Conference

      This two part Investment Conference will bring you the latest updates from economists, asset managers and pension consultants. We will be taking a look at the outlook for the 2021 economy, alternatives, cashflow strategies and global equity markets to name a few, assessing how they fared through the volatility and what we can expect for the year ahead.

      • Date: 27 Jan 2021
      • Digital Conference
      event logo
      Webinar: What to put on your GMP Equalisation project roadmap for 2021

      This webinar will bring together views from actuaries, lawyers, administrators, trustees and data experts to look at the pragmatic, collaborative solutions that are open to schemes to solve the GMP equalisation challenges in 2021. It will assess the individual challenges schemes face with equalisations and provide some practical options that are available to resolve these issues.

      • Date: 02 Feb 2021
      • Webinar
      event logo
      Webinar: Will the world return to normal in 2021?

      In this webinar, PP editor Jonathan Stapleton will be joined by BMO’s chief economist Steven Bell and director of fiduciary management, Christy Jesudasan, alongside PTL trustee director Melanie Cusack and Isio’s head of fiduciary management oversight Paula Champion to discuss the significant impact of these themes on the pensions sector.

      • Date: 04 Feb 2021
      • Webinar
      View all events
      Follow our Professional Pension Events

      Sign up to receive email alerts about our events

      Sign up

  • Whitepapers
    • How DC schemes can gain exposure to different asset classes in a low-return environment

      So far, DC plans have largely been focused on the onset of auto-enrolment and changes to the regulatory framework - be it the ‘charge cap,' ‘pension freedoms' or consultations around ‘value for money', says Annabel Tonry, Executive Director at J.P. Morgan Asset Management (JPMAM).

      Download
      Pension freedoms three years on

      In 2015 George Osborne, then the UK Chancellor of the Exchequer, decided that those age over 55 could take much more of their pension in cash. This has since opened up a range of possibilities for DC scheme members in the world of pensions.

      Download
      Find whitepapers
      Search by title or subject area
      View all whitepapers
  • Spotlights
  • Digital Edition
Professional Pensions
Professional Pensions
  • Home
  • Admin/Tech
  • Benefits
  • Buzz
  • DB
  • DC
  • Diversity
  • Investment
  • Law & regulation
  • Risk reduction
 
    • Newsletters
    • Account details
    • Contact support
    • Sign out
 
  •  

    You are currently accessing ProfessionalPensions via your Enterprise account.

    If you already have an account please use the link below to sign in.

    If you have any problems with your access or would like to request an individual access account please contact our customer service team.

    Phone: +44 (0) 1858 438800

    Email: [email protected]

    • Sign in
 
  • Investment

Why DC platforms are set to grow and consolidate

The future appears to suggest that DC platforms will see further evolution and growth
The future appears to suggest that DC platforms will see further evolution and growth
  • Al McMutrie
  • 26 July 2017
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
0 Comments

In the fifth of Newton Investment Management's DC updates, Al McMutrie of BNY Mellon says platforms are set to evolve, grow and consolidate

The fast-growing UK defined contribution (DC) market looks poised for further consolidation as providers seek to increase investor choice, improve service levels and achieve fresh economies of scale. 

According to recent data from market specialist Platforum1, DC assets within the UK workplace pension sector alone grew by over 20% year on year from Q3 2015 to Q3 2016. Assets under management stood at £271.2bn at the end of that period2, bringing a major filip - but also wider challenges - to DC platform providers.

We have noted a significant increase in market growth on platforms in the DC sector over the last 18 months, as factors such as auto-enrolment, new pension ‘freedoms' and the ongoing shift by employers from defined benefit (DB) schemes/direct investment to DC, have driven fresh asset flows into the sector. 

The UK already hosts the largest DC market in Europe, with the compound annual growth rate forecast to be in the region of 10% over the next three years3. The continuing transition from DB to DC and current regulatory environment can only boost the market further. 

However, while investment managers and the wider DC sector welcome this potential growth in assets, many platforms have been working hard to adapt and maintain their service levels, to avoid administrative issues for clients. We have witnessed a growing market share for the largest providers, and in a market that has already seen significant consolidation, we anticipate a further concentration of platforms. 

Increased competition and client demand has meant providers need to increase efficiencies, improve technology, broaden investor choice whilst addressing the demands of corporate governance all at the same time. With global markets reaching new heights and a rising demand for non-traditional assets, we are finding clients initiating conversations around new investment strategies that could be ‘platformed'. Liquidity strategies and disciplines such as liability-driven investment (LDI), absolute return and multi-asset investments are gaining prominence.

As growing asset pools migrate from DB to DC, the ability to switch between a wide range of investment options simply, efficiently and cost effectively will be of critical importance. With this in mind, we have seen underlying schemes regularly reviewing their platforms and scrutinising their provider position in the wider marketplace. In turn, we have been working closely with our investment boutique Newton, which represents a significant proportion of our platform assets, to ensure we are delivering our core strategies and potential new strategies at competitive rates. 

So the future appears to suggest that the DC platform will see further evolution and growth, as the migration from DB gathers pace and investor choice becomes ever more sophisticated. In this landscape it is likely that only the strongest, most competitive and technologically proficient players will prevail.

Al McMutrie is head of partnerships, BNY Mellon Investment Management

1. Platforum. Workplace Savings Guide. Feb 2017
2. Ibid
3. McKinsey & Co. In the eye of the storm: Transformation in the UK retirement market. April 2015
Important information: The value of investments can fall. Investors may not get back the amount invested. For professional clients only.  This is a financial promotion and is not investment advice. INV00824 EXP

 

The Newton Investment Management DC Series

  • Why DC savers need to retain a long-term focus in turbulent times
  • Inflation-proofing your DC returns
  • The view from afar: The US and Australian Pension models
  • Robo-advice: the triumph of technology over judgement?
  • Why DC platforms are set to grow and consolidate
  • A blueprint for post-retirement?

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
  • Topics
  • Investment
  • Industry Voice
  • Newton
  • Newton Investment Management
  • BNY Mellon
  • BNY Mellon Investment Management
blog comments powered by Disqus
Back to Top
Trustpilot

 

  • Contact Us
  • Marketing solutions
  • About Incisive Media
  • Terms and conditions
  • Policies
  • Careers
  • Twitter
  • LinkedIn
  • Newsletters
  • YouTube

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017
Loading