UK - HSBC Actuaries and Consultants has rapped rival firms which push smaller schemes towards generic multi-manager solutions.
The firm’s senior investment consultant, John Finch, claims rivals such as Aon and Mercer are offering “self-serving, rather than client-specific options” for schemes of £50m and below.
Finch hit out ahead of the launch of HSBC Actuaries and Consultants’ new Profile Plus which, he says, “addresses the key issue: investment strategy and provides a lifeline to small final salary pension schemes”.
Finch said: “If we can provide a service that takes the time and burden away from trustees it will help some schemes survive. Without help, many of these trustees are just going to say it is too much hassle and the bill for time/cost consultancy is too high.
“They’ll close the scheme or wind-up the scheme and walk away.” Profile Plus works on a funds under management cost basis, rather than the more traditional time/cost basis.
It works with four key stages: establishing objectives, setting the strategy, appointing the manager, monitoring and reporting.
Finch said consultants which push schemes towards multi-manager are serving their own interests – not the trustees.
He explained: “I know Mercer would argue it has got Attica, which is at arm’s length, but Mercer supplies all the manager research to Attica, so there must be some conflict there.
“With Aon and Frank Russell, it is their own service.”
He added: “Fundamentally, a move towards multi-manager still doesn’t help the small trustee, because the small trustee still has to wrestle with strategy issues – and that’s the area that can really make the difference to performance.”
But managing director of multi-manager SEI UK, Patrick Disney, disagreed and insisted multi-managers could help support trustees in developing investment strategy.
The top stories this week were the High Court's decision to block the £12bn annuity transfer from Prudential to Rothesay Life, and a separate court ruling that 'raises the bar' for pension rectification exercises.
Guaranteed minimum pension (GMP) equalisation has soared to the top of pension schemes' to-do lists, with 58% stating it is a priority project, research from Equiniti has revealed.
Professional Pensions is holding its defined contribution (DC) conference on 4 September.