As part of our series looking at what firms did to win accolades at the UK Pensions Awards 2016, PP speaks to Hymans Robertson partner Rona Train about how the firm won the DC Investment Innovation of the Year category.
Video: Hymans Robertson partner Rona Train
PP: What does it mean to win this award?
RT: We are absolutely delighted to win the DC Investment Innovation award.
Not only does this recognise that our investment approach in DC has been developing at a rapid pace over the past two years. But it also acknowledges that Guided Outcomes® (GO™) is now central to the investment advice that we give to our clients. In this category, we were up against both consultancies and investment managers and it’s great to come out on top in this dynamically changing area.
PP: What do you believe sets you apart from your peers and contributes to this success?
RT: At Hymans Robertson, we have always been prepared to challenge the accepted wisdom and to focus on what our clients really need. Being able to do that in an environment of complete independence has been a real positive for us over the recent past too.
We aim to be leaders, not followers and our clients tell us that they like our proactive and down to earth approach. GO is a great example of this. Our clients are now using this not only to monitor whether their members are on track to achieve their target incomes at retirement, but also to inform appropriate investment strategies. GO is the most advanced framework of its type in the market, and it will continue to be central to the further development of our to- and through- retirement investment strategies.
PP: What are the key challenges facing your pension scheme clients and how are you helping them address these issues?
RT: Our DC clients face a range of challenging issues at present, ranging from a rapidly changing governance background through to the development of appropriates to- and through- retirement investment strategies.
Our approach to advising clients puts member outcomes right at its heart. It focuses on giving trustees and companies a clear picture of what outcomes their members will achieve at retirement, and then allows them to set clear and measurable objectives on how their can improve things going forward. This ensures that they focus their time and budgets on the aspects that really matter to improving member outcomes.
PP: How will you continue to improve your services to pension scheme clients over the coming 12 months?
Over the next 12 months, our focus will be on three key areas.
Firstly on further refining our approach to governance and creating a fully integrated risk based framework that focuses clearly on value for members.
Secondly, we will be refining our investment strategies and focusing increasingly on how we can improve outcomes, deliver better value for money and achieve a smooth transition through retirement for members.
And finally, we will be continuing to develop our GO proposition. We will be rolling out both our red/amber/ green (RAG) assessments and our online portal to a wider range of clients. These will help members understand whether they are on track to achieve their target income at retirement and what they can do about it if they are not. We have already seen the tangible benefits for clients who are using both the RAG assessments and the online portal, in terms of improving member outcomes.
Extract from Hymans Robertson's original UKPA submission
In response to Freedom and Choice many advisers recommend that clients set up different lifestyle strategies targeting cash, annuity purchase and drawdown, with one of these being the default.
However, Hymans Robertson has taken this to the next level – and, by fully integrating its market-leading Guided Outcomes® (GO™) framework into its default strategy review process, it was able to help clients create strategies that most closely matched the needs of the different cohorts of their membership, creating a much more personalised and appropriate default strategy.
Some 80% of Hymans' DC clients have now put a new default strategy into place and over 500,000 members have been through the initial GO assessment.
By using GO as a key analysis tool, Hymans has been able to project members' expected pot sizes and create strategies that de-risk members in the pre-retirement phase to investments that most closely match their expected actions at retirement.
During the past year, GO has also helped Hymans to analyse aspects including the proportion of a scheme's membership that is likely to breach the lifetime allowance. This has allowed the firm to progress its thinking in relation to the length and shape of de-risking strategies for clients where a significant number of members are likely to hit the LTA.
The success of this approach has helped Hymans Robertson win significant new business – and it had a range of new client wins on the DC side over the past year, including two DC schemes which will be among the largest in the country within the next five years.
Hymans believes there is a tangible benefit to using GO – not only to assess members' likely outcomes against their targets and help manage them towards better outcomes, but also to actively inform the construction of appropriate default investment strategies.
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