Your asset allocation policy is likely to have a greater impact on long-term investment returns than the choice of investment managers. Understanding the level of risk being taken, measured relative to an explicit set of investment objectives, is critical.
We can advise you on the choice of asset allocation policy, covering a wide range of traditional and alternative asset types.. Our approach emphasizes the need to consult and communicate with all interested stakeholders, including the sponsoring employers of trust-based pension plans.
For defined benefit plans, we may use stochastic asset-liability modeling tools to investigate levels of risk associated with different asset allocation policies. These are sophisticated models that incorporate a wide range of asset types, interest-rate and inflation hedging strategies and dynamic asset allocation policies linked to future investment returns, market conditions or solvency levels assessed according to pre-agreed criteria. The outcome is not only an asset allocation policy for the immediate future, but a plan for future changes to asset allocation to capture investment gains and reduce investment risk over time.
It may be several years since you first appointed your investment managers and set their objectives. Although these objectives and the overall investment structure may have been reviewed from time to time, it pays to take a fresh look at your arrangements to check that:
- The structure is coherent
- There is adequate diversification between asset classes and managers
- Every manager is contributing in a meaningful way to overall performance
We will provide a complete assessment of your fund management arrangements, including analysing the styles of your managers, how they fit together and the objectives they have been set.
Our manager research process provides valuable information on whether managers are delivering and meeting your objectives, and the likely impact of any changes in personnel, systems, structure etc that may have a material effect on their ability to manage money. We have a clear rating system for managers that enables us to rate them on key metrics such as capability, performance record, management ability etc. We use this research to recommend new managers for our clients and to advise when existing managers should be replaced.
Our manager research process focuses on what matters most to our clients—selecting and evaluating the most appropriate managers to meet their needs. We are constantly developing new measures for the objective assessment of fund managers. Our aim is to identify managers who offer sustainable competitive advantages that produce above-average returns with a commensurate level of risk.
We rate managers on both quantitative and qualitative bases, enabling us to determine a Buy, Sell or Hold rating for each manager. Key criteria are weighted appropriately for your needs, as we recognise that everyone is different.
Our research process covers not only traditional forms of investment, namely equities and bonds, but also alternative asset classes including hedge funds, property, enhanced index funds and structured products.
We can help you understand the performance of your investment managers, and how each of them is contributing to overall performance. Our monitoring service is supported by our investment manager research programme; our research team carries out a comprehensive schedule of investment manager visits and detailed analysis of portfolios.
Our service includes: - determining the appropriate factors by which to measure your fund managers
- setting the agenda for your fund manager meetings
- assessing your fund manager's performance against the agreed objectives on a regular basis, including attribution analysis
- expert written commentary on your portfolios
- commentary on market performance
- analysis of topical issues that may affect your pension fund
We recognise that there is bewildering choice of investment funds available for defined contribution plans. How do you go about choosing the rights ones for your participants?
We can help. By understanding your needs, evaluating the membership profile, conducting research, which can include questionnaires and online feedback forms, we can suggest the most appropriate funds for you that meet the key objectives of offering choice and matching the investment needs for different risk appetites and age profiles.
We can help you design the most appropriate lifestyle matrix and default fund for your scheme – it is important to bear in mind that 80% of members in defined contribution plans do not make an active investment choice and do not switch investments from one year to the next. We have developed sophisticated tools for the analysis of risks associated with particular lifestyle strategies, so that the likely range of outcomes at retirement can be compared for different strategies and the levels of risk can be communicated to participants.
Once you have decided to appoint new investment managers for your scheme, moving the assets from the existing managers can be a difficult and time-consuming process. Our specialist team has many years' experience of asset transfers.
We can advise on the most appropriate method of transfer, whether by cash, stock or a combination, deal with the legal requirements and oversee the whole process to ensure it runs smoothly, on time and on budget. Our aim is always to minimise the costs of transfer for you and to ensure your assets remain invested in the markets whenever possible.
Communications are a vital part of our investment consultancy service. Our experience includes helping our clients with moving from defined benefit to defined contribution schemes, making the right investment choices, and ensuring that investment issues are an integral part of overall pension scheme communication strategies.
We can provide scheme booklets, information for your intranet site or provide a dedicated website to help your members understand and appreciate their options under your pension scheme. Our service can include regular topical factsheets, member communication materials, investment commentary for scheme accounts and regular reports on the performance of your chosen funds.
We recognise that pensions and investments are complex areas in today's ever changing world. There is extensive regulation and legislation that investors need to keep fully aware of.
Our training programmes can be tailored to your specific needs or you can attend one of our regular courses, giving you the opportunity to mix, and share views with other attendees.
We will help you to understand the issues around setting investment strategy, to measure your own attitude to risk, to understand the investment choices you have and to make sense of the information supplied by your investment managers. Our training includes analysing real-life scenarios, helping you to make the most of the day and how you can implement what you have learnt for your own circumstances.