Investment Strategies

First published on pensionprofessionals.com

Laura Catterick says this evolving model can offer an attractive path forward

Image: Laura Catterick, Mobius: The future of pension investing will be defined by structures that are open, adaptable, and rigorously governed

Rethinking investment access – why open architecture and life wrappers are redefining pension strategy

In today’s complex and cost-sensitive investment environment, pension schemes and wealth managers face a challenging dilemma. We are all expected to deliver better member outcomes, reduce fees, meet increasingly rigorous regulatory requirements, and respond dynamically to market developments. These pressures are especially acute for mid-sized and smaller schemes, which often lack the resources and scale to compete with larger institutional investors.

A compelling solution is emerging at the intersection of open architecture platforms and the use of life company fund structures. Together, they are creating new pathways for trustees, wealth managers, and pension providers to deliver value, reduce friction, and align with public policy goals.

Delivering true investment flexibility

Conventional platforms are often encumbered by limitations. They rely on proprietary fund menus or are tied to the investment preferences of a sponsoring institution. This model restricts the ability of advisers and fiduciaries to curate truly whole of market strategies aligned with specific scheme objectives, whether that’s cashflow-matching for maturing DB schemes, or building diversified private market exposure in a DC environment.

Open architecture platforms stand in stark contrast. By giving clients access to a wide universe of fund managers, asset classes, and wrappers, they offer a far more flexible toolkit. Mobius, one of the leading UK examples, supports over 900 funds across accumulation and income mandates, from more than 80 asset managers. Its independence means there is no inherent bias toward particular strategies or asset managers. Selection is purely needs-based and client-led.

This model enables greater choice and better outcomes. Advisers can tailor portfolios using best-in-class solutions. Trustees can build governance-friendly, multi-asset blends with better fee transparency. And critically, both can respond more nimbly to macroeconomic change and emerging investment trends.

Expanding access through life wrappers

While open architecture creates optionality, life wrappers bring structure, simplicity, reduced costs and efficiency of execution. The life fund format – long used in insurance-based pension solutions – offers several key advantages for schemes and providers alike.

First, it enables tax-efficient investing, particularly for overseas assets. Mobius’ own analysis shows that unit-linked pension funds can significantly outperform comparable unit trusts, largely because of lower withholding taxes and reduced embedded costs.

Second, life wrappers provide a pooled vehicle through which even smaller schemes can access sophisticated strategies. Rather than bearing the operational and legal complexity of investing in private equity or infrastructure directly, schemes can gain exposure via the life-wrapped fund managed by an authorised provider. Mobius has played a key role in this space by helping launch and seed the first Long-Term Asset Funds (LTAFs), which are increasingly being integrated into blended funds and default DC solutions.

Third, life funds are fully regulated and benefit from strong governance. In the Mobius model, this includes due diligence on managers, liquidity assessments, valuation scrutiny, and oversight aligned with FCA and PRA standards. This gives everyone involved confidence while easing administrative burden.

Meeting the moment: policy, reform, and alignment

The UK pensions landscape is undergoing meaningful reform. The Mansion House Accord sets out a commitment to investing more in private markets and long-term productive assets. This is further supported by the Pensions Investment Bill, which seeks to remove barriers and encourage schemes to invest in ways that support UK economic growth.

These reforms align closely with the benefits offered by life wrappers and open architecture platforms. By making infrastructure, private credit, and growth equity funds accessible to a broader range of schemes, these structures unlock the potential for greater pension engagement with productive capital. Meanwhile, the ability to wrap complex assets in a regulated, tax-efficient format ensures alignment with both fiduciary responsibilities and permitted-link regulations.

This is not just about headline-grabbing reforms at the national level. For wealth managers and smaller schemes, it’s a question of capability. The policy direction is clear: pensions must play a more active and innovative role in the economy. But without the right infrastructure, it’s hard for smaller actors to participate. Mobius’ structure addresses this gap by combining institutional-quality oversight with operational simplicity.

A future-ready investment model

There’s a reason why life wrappers and open architecture are gaining traction not just in the pensions sector, but also among charities, endowments, and family offices. These models offer a powerful blend of regulatory certainty, cost control, and strategic flexibility. They support everything from passive equity allocations to bespoke private market mandates. They reduce the friction associated with custody, dealing, and tax. And they enable trustees and advisers to construct portfolios that are truly outcome-focused.

For private wealth managers, pension schemes, and product providers looking to improve client outcomes while managing their own regulatory risk, this evolving model offers an attractive path forward. It is cost-efficient, operationally light, and compatible with the long-term goals of both policymakers and savers.

The future of pension investing won’t be dictated by one-size-fits-all models or outdated platforms. It will be defined by structures that are open, adaptable, and rigorously governed. Those embracing open architecture and life-wrapped solutions today are positioning themselves not just for compliance, but for leadership.

Following the Liability Driven Investment (LDI) turbulence last year, there have been multiple interventions from regulators and parliamentary committees to understand the causes of the spike in collateral calls – and work is still underway which is likely to see further regulation of the sector.

Despite the noise surrounding LDI, it is interesting to note that the basic concept of pension schemes matching their assets and liabilities continues to make sense. The questions now are far more about the use of leverage, the need for collateral buffers and whether leveraged LDI remains appropriate for all schemes.

In reality there are still a huge number of UK schemes using LDI as an integral part of their investment strategies as DB schemes mature – and as the dust settles, demand remains for DB schemes to access high quality LDI funds to meet their needs.

We all know that pension schemes have different investment strategies and approaches to meeting their obligation to pay members’ pensions.  Some schemes are better funded than others, some are more mature with different cashflow profiles, and an increasing number are on a flightpath to buy in/buy-out.

This inevitably means there is a demand for a wide range of different styles of LDI funds with different investment strategies.

That’s why the team at Mobius seek to provide exposure to LDI funds from several managers via the platform.  We believe we are unique in that we currently host over 100 LDI funds on the platform across 5 LDI managers.

Not all platforms have this breadth of LDI offerings and restrict schemes to a narrow portfolio of LDI funds or even only to in-house funds.  We believe this approach reduces choice and flexibility and is another reason why schemes continue to choose Mobius as their investment administration provider.

Thank you for reading this blog, to find out more about Mobius, please visit our home page.

There’s no doubt that managing the spike in Liability Driven Investment (LDI) collateral calls last September was a challenge for all of us – whether trustees, asset managers, consultants, or platforms.  Like many in the industry, we’ve been talking to interested parties to understand how we can improve our proposition to meet the requirements of the LDI market for 2023 and beyond.

One initiative we’ve introduced at Mobius is automated collateral waterfalls, where our clients nominate in advance which funds will be used to meet future calls and in which order.

This means we can automatically use the agreed fund to meet calls without the delay of awaiting instructions – and if the agreed fund can’t meet the call, we have instructions about which subsequent funds to sell.

Automated collateral waterfalls will provide added comfort that calls can be met on time and in full and will reduce the need for advisors and trustees to be involved in the process.

The events of last September, re-emphasised the benefits to our clients of being on the Mobius platform.  Yes, we experienced long working days with soaring trading volumes, but we were able to respond to our clients’ needs.

At the same time as managing collateral calls, we efficiently managed all other aspects of our clients’ investment administration, including transitioning assets, switching funds, rebalancing portfolios, monitoring trigger points and manufacturing bespoke funds – all the while taking execution risk away for schemes of all sizes.

If the volatility in rates and LDI markets re-emerges in 2023 or beyond, we’re likely to see further spikes in collateral activity.  Navigating these changes can be a challenge for trustees and consultants – but those with assets held on the Mobius platform can be confident we will continue to administer changes in asset allocation and collateral management on their behalf.

Whatever LDI strategy schemes choose to follow, the timely and accurate reallocation of scheme assets is essential; whether it is selling liquid assets to meet collateral calls or unwinding existing LDI investments.  This is where the benefits of the Mobius platform really kick in; consultants can focus on advising their clients on the right strategy, rather than worrying about investment administration and the execution risk involved.

For schemes managed on the platform, consultants or trustees simply need to send us the instruction to execute their required changes. Our in-house specialist implementation team will do the rest, seamlessly, safely, and timely.

Helping our clients manage LDI strategies and facilitating waterfall collateral management are further benefits of the Mobius platform and set us apart from other institutional pension platforms.

If you would like one of our team to contact you, please click here.

Over 90% of pension schemes are expected to have a professional independent trustee within the next five years according to Isio’s authoritative Professional Independent Trustee Survey. The consultant estimates 6 out of 10 schemes already use independent trustees – a trend we have seen at Mobius, with an increasing number of our clients opting to use professionals today.

The rise in professional trustee appointments is changing the dynamic of how schemes are advised and how they use that advice. Where once the investment consultant was the primary source of advice and strategic counsel for schemes, particularly smaller ones, now many can look to their professional trustee for guidance instead. Trustees have always been ultimately responsible for the governance of their schemes and this remains the case.

This shift is good for both schemes and consultants. Schemes will be able to undertake more decision-making activities themselves. At the same time the consultants will be able to focus on strategic advice where they can really add-value, rather than being bogged down in more routine trustee decisions.

Of course, professional trustees offer deep expertise in scheme governance, setting strategy, member administration, record keeping and all the other responsibilities of trusteeship, but few have the resources to undertake investment administration on a day-to-day basis.

That’s where Mobius comes in. Mobius’ investment platform capabilities and infrastructure help professional trustees meet their administration and governance responsibilities. These range from core administration and execution capabilities, to providing bespoke data for transaction cost and TCFD reports. Using Mobius helps trustees demonstrate they have the resources and capabilities to meet their professional and regulatory responsibilities, particularly at a time when increasing regulation of the sector continues.

The shift to professional trusteeship is likely to continue over the coming years and we will continue to innovate and develop our services to meet the needs of our clients. To find out more, please contact one of our team today.

Thank you for reading this blog, to find out more about Mobius, please visit our home page.
If you would like one of our team to contact you, please click here.

We set out how asset managers can life-wrap their funds on the Mobius platform, to make their strategies available to pension schemes of all sizes.

Many members, and the UK government, want to see pension assets used to support the drive to net zero and other ESG initiatives. We’re also seeing increased demand for pension assets to be invested in long-term, illiquid infrastructure projects, venture capital, private assets, structured capital and other complex structures.

The pace of managers developing exciting new strategies to meet these demands is ever increasing. So, for large pension schemes, which can deploy significant capital to invest in bespoke funds, this presents huge opportunities.

But for most of the UK’s mid-size and smaller schemes, high minimum investment limits, or lack of liquidity, can put these strategies out of reach – or does it?

UK life company structures offer an effective means to pool funds making them ideal for pension schemes due to their flexibility, tax efficient status and compliance with the permitted-links regime. But for many asset managers the cost, capital reserving and regulatory burden of creating their own life company structure are prohibitive.

That’s where Mobius comes in. We effectively provide access to our life company to asset managers to life wrap segregated portfolios which are then available to investors on the Mobius platform. These funds can include bespoke portfolios, created for a single pension scheme, or pooled funds available to all schemes.

Mobius already works with multiple asset managers to make our funds available to UK pension schemes in a cost-effective and flexible manner. The access to the Mobius company for asset managers means trustees and consultants can consider a far wider range of strategies – many of which can be bespoked to their exact requirements.

Using Mobius to life-wrap investment strategies offers asset managers significant cost advantages, as well as taking away the regulatory burden and need for regulatory capital.

Life-wrapping funds on the Mobius platform offers more choice to investment consultants, pension schemes and their members, while offering fund managers an effective way to distribute their products to more schemes.

If you would like to find out more or discuss how we can life wrap a fund for you, please contact us today.

Thank you for reading this article, to find out more about Mobius, please visit our home page.