Default funds in defined contribution (DC) schemes need to take advantage of "more complex investments" says BlackRock's Claire Finn.
The asset manager's UK head of DC made the point at a seminar on 13 September where she said a multi-asset approach can deliver adequate returns.
The old split between bonds and equities in a portfolio is no longer able to meet people's retirement expectations. This should be combined with a higher contribution rate of 15% a year to make savings go as far as possible.
She said: "Individuals need to start to save as soon as possible and we need more complex investments for default funds."
Any focus on cost which does not examine the overall context of returns for members could harm delivering value for money, she added.
Trustees and fund managers should focus on "what they want to achieve rather than how they do it".
One area which remains to be resolved is transaction costs where there are different ways of measuring them. "We need a consistent methodology for transaction costs," Finn continued.
Different methods include the revised Markets in Financial Instruments Directive (MiFID II) which comes into effect on 3 January 2018 for all investment firms and the Packaged Retail and Insurance-based Investment Products (PRIIPs).
The Department for Work and Pensions (DWP) is currently exploring transaction costs disclosure alongside the Financial Conduct Authority (FCA) which started their work in March 2015.
The DWP expects to publish its response to the consultation at the end of 2016.
The FCA is also conducting its asset management market study and will publish an interim report at the end of the year.
Meanwhile the Investment Association (IA) set up an independent IA advisory board in March 2016 to work on a new disclosure code for the asset management industry.
The Transparency Task Force looked at the theme of transaction costs at a seminar on 12 September.
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