Know Your Customer requirements are the cornerstone of modern investment regulation. But in UK defined contribution (DC) pensions, many pension plan trustees and sponsors lack the information and analysis that enable informed decisions. So they are at risk of approving investment offerings—whether the default investment strategy or self-select fund options—without fully considering these products' suitability for their specific membership. We believe that, in time, The Pensions Regulator will explicitly prescribe proper fact finds as well as suitability mapping and documentation, because these are central to providing appropriate member outcomes. And we expect that master trusts will take the lead, and will before long be able to demonstrate that the default solutions they offer can be mapped to the needs of individual employers using evidence-based research specific to each employers' workforce.
Meanwhile, how should trustees, plan sponsors and master trusts improve their processes and membership insights so they can make decisions that are better aligned with members' needs?
In this paper we explore the processes, tools and guidelines that can help achieve a fuller understanding of your pension plan membership's specific needs, and so enable better outcomes for your members.
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