Reducing costs by transitioning assets from an expensive bundled investment arrangement
The background
At the start of 2020, we were appointed to advise a £70m pension scheme. The Trustee and Company were both frustrated with the complexity and opaqueness of their investment arrangements, as well as the high fees they were paying to the fiduciary manager.
Our solution
We helped “unwind” this arrangement, moving the assets onto an investment platform. An investment platform provides access to a large number of investment funds from a range of managers, all through a single legal contract. Whilst this transition isn’t yet common in the UK pensions industry, the benefits for this scheme were clear: maintain a low governance solution, reduce complexity and fees, and remove the potential conflicts of the fiduciary arrangement.
The outcome
We have reduced the costs associated with the investment strategy by 75%. This was driven both by us re-negotiating existing fee agreements (especially where investments continued to be held “off-platform”) and the structural change in investment approach.
