As part of our series looking at what firms did to win accolades at the UK Pensions Awards 2016, PP speaks to Hymans Robertson partners Patrick Bloomfield and John Walbaum about how the firm won the Investment Consultancy of the Year category.
Video: Hymans Robertson partner Patrick Bloomfield
Interview: Hymans Robertson partner John Walbaum
PP: What does it mean to win this award?
JW: We are thrilled to win this award having last won it in 2013. It’s recognition for all the innovative work we are doing to help our clients manage risk and construct robust investment portfolios. It also acknowledges the support we are providing to the LGPS in making sense of pooling, and highlights the benefits of our focus on remaining an independent advisory firm. This award is for all our staff who work so hard to deliver the very best advice and solutions to all of our clients.
PP: What do you believe sets you apart from your peers and contributes to this success?
JW: Our independence and focus on doing the very best for all our clients, without any conflicts of interest, remains key. What really sets us apart is being at the forefront of helping schemes understand the importance of cashflow management and generating income, in addition to the balance sheet management of Schemes. We undertook detailed analysis of the market and the financial position of schemes to help inform them where they are on their own road to resilience. (I.e. are they still in the Growth phase? Or have they become significantly cashflow negative and entered the Income phase? Perhaps they are in the Protection phase and can consider transferring risk to other parties?)
Alongside this research, we developed our GrIP (Growth, Income, Protection) framework to help clients add the generation of income to meet benefit payments (and other outflows) as a key priority. Our key tenet is that schemes need to make sure they are never forced sellers of any asset. This is crucial as they go cashflow negative at the same time as needing to retain growth assets to fill funding gaps, and it is great to see tPR recognising the importance of this issue in their latest statement. Too many schemes have not yet understood the importance of this. We are keen to help them understand the issues and structure their portfolios appropriately to meet the cashflow challenge, while maintaining their focus on generating growth and protecting themselves against adverse market movements.
PP: What are the key challenges facing your pension scheme clients and how are you helping them address these issues?
JW: The key challenge is to deliver better outcomes for our clients in the current low interest rate environment, with corporate earnings being under pressure and the need to generate income to meet ever increasing benefit payments.
Our GrIP framework helps schemes address all those issues in an integrated way as part of our three-dimensional approach to scheme funding. We help our clients develop realistic strategies, backed by appropriate analytics to focus on what really matters.
PP: How will you continue to improve your services to pension scheme clients over the coming 12 months?
JW: By building on the success of our GrIP framework, we will help schemes embrace all the risks they need to manage and construct portfolios accordingly to meet their end game objectives.
We will remain independent and free from conflicts of interest, continuing to put our clients at the heart of everything we do. We’ll continue to work with asset managers to help them create products and funds that meet our clients’ requirements and are fit for purpose in the future.
Extract from Hymans Robertson's original UKPA submission
Whether it is advising defined benefit or defined contribution schemes, Hymans Robertson's focus remains the same; delivering advice that focuses on the best possible outcomes for its clients. This approach has brought the firm considerable success, with investment practice growth of 8% testament to the relevance and value of its approach.
During the year, Hymans developed its Growth, Income, Protection (GrIP) framework to help schemes give focus and clarity to their investment strategy, with particular focus on addressing income requirements.
Hymans also developed a new risk management framework during the year – The Road to Resilience – to help schemes understand risk.
This framework is based around four measurable milestones – managing the cost of benefits, taking the right risks, managing capital risks and transferring risks – and helps clients understand where they are on their risk journey and prioritise risk management efforts.
Hymans also has enhanced its defined contribution offering and, in response to the pension freedoms introduced in April 2015, has developed an innovative approach to default investment strategies.
Using its Guided Outcomes® (GO™) analytics, Hymans uses this information, along with the additional information it receives from the member about their other benefits to direct members into appropriate automatic investment strategies.
Some 80% of its DC clients have changed their default investment strategies as a result of its advice and over 500,000 members have been through the initial GO assessment.
During the year, Hymans has also innovated in the risk transfer market giving clients better access to pricing and analytics. It advised on 12 risk transfer deals over the period, with an impressive 90% conversion rate.
The UK Pensions Awards 2016 Winners’ Series
- How Hymans Robertson won the Actuarial / Pensions Consultancy of the Year award
- How Capita Employee Benefits won the Employee Benefits Consultancy of the Year award
- How LCP won the DC Consultancy of the Year award
- How Hymans Robertson won the Investment Consultancy of the Year award
- How Travers Smith won the Pension Lawyers of the Year award
- How LCP won the Risk Reduction Adviser of the Year award
- How B&CE won the DC Pension Provider of the Year award
- How The People’s Pension won the DC Master Trust of the Year award
- How Hymans Robertson won the Third-Party Administrator of the Year award
- How LCP won the DC Innovation of the Year award
- How Hymans Robertson won the DC Investment Innovation of the Year award
- How Capita Employee Benefits won the Communication Innovation of the Year award
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