Greater diversity of thought and approach is needed if schemes are to make the most of the current low return environment.
Speaking on a panel at the PLSA Investment Conference RPMI Railpen investment director Ciaran Barr said schemes should not fear taking strong investment decisions.
"We have an industry that was historically built around beauty parades and while that is changing it still goes on," he said. "I think there is a career risk factor here in that it is easier to fire a manager for underperformance than it is to take the decision yourself internally."
Barr also recommended schemes take the time to overhaul their governance structures so they are able to take advantage of investment opportunities as they arise.
He also added that schemes should move away from traditional approaches if they are to deal with deficits.
"You have to move away from orthodoxy and think outside the box," he said. "You have flexibility in how you fund your pension so don't lock yourself into assets with negative real rates of return when there are other options out there."
Barr recommended schemes take advantage of more illiquid assets though urged caution when it comes to cost.
"I think you should max out on illiquidity but I'm not saying you should just go and throw your money at assets where fees are high. You need to look out the niche opportunities out there."
Fellow panellist Hermes Investment Management chief executive Saker Nusseibeh agreed that costs were a major issue and said schemes should understand what they are getting for their money.
"We have to rethink fees in this low return environment," he said. "If you are paying 40bps and getting 20% return then that might not be so bad but if you are getting 2% and still paying 40bps then that is a big issue. It's time for a rethink of relationships with asset managers and you have to really think about what you are getting for your money."
He continued: "Over the years asset managers have disguised beta as skill and made retail clients pay a lot of money for it," he said. "Make sure you are paying for skill."
Barr agreed saying that costs are "simply too high" and said schemes should make sure they understand what they are getting. He pointed to the work Railpen has done on understanding costs saying that "we've managed to cut £100m of costs so far but we still have further to go."
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