Analytical services company Camradata has published a white paper investigating defined contribution (DC) investment options and market challenges for investors.
The firm's white paper, titled A Universal Solution for the Individual, examines trends in DC assets and shares insights from its recent DC roundtable which involved investment managers and pension managers from a number of firms.
The roundtable revealed, according to a Willis Towers Watson study on global pension assets, DC assets have overtaken defined benefit (DB) assets for the first time, having grown at a faster rate of 8.9% while DB assets have grown by 4.6% globally.
While 82% of the UK market is still invested in DB assets, Camradata stated this is "set to change".
The white paper looks into the challenges and investment opportunities currently in the DC market and how these can be adapted across schemes and individual members.
In particular, it suggests further considerations are needed around ESG integration and whether specific allocations should be made in all aspects of capital management, not merely offering it as an option on the side.
Managing director Sean Thompson said: "There are a variety of DC options available to the investor, but employers must decide which one would be most suitable for their employees.
"In addition, as the interest in ESG factors swells globally, there is more of a requirement for a variety of options across investments."
The white paper also suggests cutting costs and fees to make things "cheap" does not equate to value for money, and reveals fresh thinking is needed on how trustees might get the kind of risk-return pay-off they need for the coming years.
Thompson added a key issue holding up the DC market is "the slowness of financial services in the UK to embrace technology".
"It is imperative for the DC pensions industry to be more mobile, as a greater proportion of the population becomes aware that they have one of more pension pots," he continued.
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