UK - The progression of the UK defined contribution market has been so rapid that there are virtually no lessons to be learned from the United States experience, a leading consultant claims.
Watson Wyatt partner Kevin Stratford said virtually all relevant lessons have already been learnt.
He said: “Every provider that’s set up in the UK has had a look at what the US, and for that matter Australia and other mature DC markets have done and have based their products on them.”
But nevertheless Thread-needle Investments is planning to send staff over to the US later this year to visit American Express Financial Advisors – its new parent company – and see what lessons and advances can be brought back to the benefit of its UK clients.
Stratford argued, though, that it is “difficult to perceive what they might bring back but Amex is an experienced DC operator”.
Legal & General Investment Management head of DC services Ian Richards was also sceptical about the prospects of bringing lessons from the US back to the UK.
He said: “It’s not that the UK is behind the US market, as opposed to it being relevant to the trustees and the members in the UK.
“It’s a different culture, and what is relevant in the US is not necessarily the case in the UK, as we know in many areas.”
But Threadneedle head of DC business Emma Douglas disagreed. She argued that the US was still far ahead of the UK market, particularly in terms of member communication, financial planning tools and internet access.
She said: “The things they offer are leading edge, state-of-the-art stuff.
“That’s what we want to do and I believe that if you look at what DC is like in the US, you are still seeing a picture of a possible future for the UK.
“The Americans are still ahead of us, and there’s stuff we can learn from them.”
DC schemes have been in existence for nearly 30 years in the US, and Amex is currently one of the largest providers.
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