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Platform

Lightbulbs hanging from a branch in a garden | Mobius
Investment Strategies, Innovation, Platform

Pension dashboards will drive engagement, but providers won’t go far without key data

Mobius believes that pension dashboards will be a game-changer, driving peoples’ engagement with their pensions and ultimately leading to a higher, more sustainable incomes in retirement.

But to succeed, pension dashboards will all need accurate information from a multitude of sources. Feeds will include pension valuations, daily and historic pricing and other critical data, all delivered in near real time.

That’s where schemes administered on the Mobius platform will have a clear advantage. We already hold schemes’ pricing data and can feed this into dashboard providers’ systems, using data standards and formats they require.

But why are pension dashboards such a great idea? The government estimates that people may build up to (some say at least) 11 different pension pots in their lifetime, so it’s no surprise that many find it almost impossible to keep track.

Dashboards will allow people to access information about all their pension savings, including the state pension, in one place online, on-demand, transforming how people engage with their pensions and savings.

Since the Pension Schemes Act was passed in 2021, stakeholders across the industry have been working to prepare for the introduction of dashboards – which for large schemes and master trusts should start from 2023.

We now have a clear view of the regulations that will underpin the provision of dashboards – following the DWP’s consultation which closed in March. The challenge is to get everything in place for the start of the dashboard revolution.

And there is no underestimating the challenge. Providers will need to locate multiple schemes using personal information such as name, address, date of birth and NI number. They will be obliged to protect people’s identity and meet the UK GDPR standards. They will also need to work out how information from multiple different schemes, both DB and DC, often with different benefit outcomes will be presented. The task is mind boggling.

But at its heart the success of the dashboards project will rely on good quality data.

At Mobius, we’re ready. We have accurate historic, and current, pricing data about all our pension scheme clients’ investments. We’re ready to feed this into dashboard providers’ systems, using the standards and formats they require.

It’s another advantage to schemes of using the Mobius pension platform to administer their investments and power their reporting. If you’d like to find out more about how we’re working to provide key data to dashboard providers, please give us a call 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.

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Institutional Investment Platform of the Year | Mobius
Awards, Platform

Mobius win Professional Pensions Institutional Investment Platform Provider of the Year award for fourth successive year

We are delighted to have won the Professional Pensions Institutional Investment Platform of the Year Award at the UK Pensions Awards 2022. This is the fourth year in succession Mobius has won the award.

 

Now in the 25th year, the prestigious awards, “shine the light on excellence and recognise the advisers, providers and investment managers that offer the highest level of innovation, performance and service to occupational pension schemes and their members and have done the most to improve this over the past year.”

The award highlights Mobius’ innovation, exceptional performance and outstanding client servicing. Highlights include:

  • Innovating to support DC consolidation: Using the power of the Mobius platform to support DC consolidation and create operational and efficiency savings with an innovative Master Trust.
  • Building a DC default fund that delivers a net-zero solution: Worked closely with a client to develop and enhance its net-zero default solution.
  • Innovating to make illiquid credit funds available to DB schemes: Made alternative credit strategies from leading asset managers available to DB schemes.
  • Manufacturing a Structured Equity solution: Launched a leading asset manager’s Structured Equity solution – a first for the industry.
  • Developed bespoke LDI portfolios for DB schemes: Worked in partnership with a leading asset manager to create a bespoke LDI solution for schemes of all sizes.
  • Preparing schemes for buyout with targeted basket of gilts holdings: Developed our capabilities to buy and hold a bespoke basket of direct gilts to support schemes moving to buyout.
  • Innovating to support pension scheme’s regulatory reporting needs: Focused solution to provide trustees with scheme specific ESG and transaction cost reports.
  • Enabling schemes to exercise proxy voting power: A pioneering approach to enable schemes to vote on shares they own. This pioneering approach is the start of enabling direct influence and is only possible due to our investment administration capabilities.

We’re excited the UK Pensions Awards judges have recognised our achievements and we are proud to have won the award four years running. It is particularly pleasing to be recognised by an independent judging panel of our peers.

This award marks us out as the UK’s leading independent institutional investment platform. We would like to thank our clients and their advisors for their support and the Mobius team for their exceptional commitment to delivering an outstanding service to our clients.

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

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Graph on computer screen showing shareprice performance over time | Mobius
Platform

Pooled fund proxy voting – the Mobius platform approach

The government has long been encouraging pension schemes trustees to consider the environmental, social and governance (ESG) factors and stewardship approaches in their investment decision making.

Occupational schemes with more than 100 members already need to prepare a Statement of Investment Principles (SIP) which set out their investment policies and report annually on the extent to which they have followed their policy.

Trustees are being encouraged to vote their shares at company meetings to support the policies set out in their SIP and influence how companies respond to ESG and climate change issues.

Proxy voting is easy enough for large schemes which invest through segregated portfolios and can vote their shares directly. It’s somewhat harder though for schemes which hold their assets in pooled funds to influence voting – which is generally undertaken by the asset manager on their behalf. The fund managers’ stewardship approach may or may not reflect the ultimate owner’s SIP.

Late last year a government Taskforce on Pension Scheme Voting Implementation reported on the issue. It wants to see pension schemes trustees empowered to vote their shares, even when they are held in a pooled fund structure.
At least one major asset manager is already enabling institutional investors in pooled funds to cast votes in proportion to their share of the fund.

At Mobius we want to support all our clients invested in pooled funds on our platform to be able to vote their shares. We have already taken steps to enable asset owners to set out their voting intentions and to vote on their behalf on some of the pooled funds held on our platform. Looking forward we are also working to extend this range further.

Proxy voting of pooled fund assets enables trustees to live up to the promises set out in their SIP and empowers and engages scheme members in the decisions their schemes’ take.

At Mobius, we’re ready to make proxy voting of pooled assets a reality for trustees. If you’d like to find out more about our approach, please give us a call today.

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Mobius team in a meeting room discussing investment strategies | Mobius
Investment Strategies, Platform

Reducing implementation risk for pension consultants

Let’s consider what happens when a consultant has two clients – one on the Mobius platform and the other directly invested with managers.

In this example, both schemes use a selection of fund managers and want to withdraw money to pay the transfers. The cash amounts required to pay these transfers are sufficiently significant for it to make sense for the withdrawals to be made to bring the portfolio in line with the benchmark asset allocation.

With the directly–managed scheme there is a lot to do. The consultant needs to contact all the managers for prices to calculate the manager allocations and then calculate the quantum of each withdrawal. They then need to complete the withdrawal paperwork, instruct all the managers, collate all the receipts and calculate the new asset allocations following the withdrawals.

This ‘low value’ task will probably take the consultant several hours to complete and leaves them exposed to execution risk. They will also rack up significant time cost – and all for an exercise seen of as having only modest added-value to the client.

In comparison, the other scheme is managed on the Mobius platform. Here the consultant simply sends Mobius one authorised instruction, which we implement and report back to them via a transaction statement and valuation. Simple, safe, cost effective and efficient.

The same is true for schemes looking to change strategy or transition from one fund manager to another. Work which can take several days off-platform is easily completed in ‘real time’ by using Mobius.

So, as part of all our jobs is to manage risk effectively – prudent schemes and consultants are reducing risk by using Mobius to deliver professional platform-based investment administration.

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Close up of side of tell commercial building in city of London | Mobius
Pension Administration, Pension Strategy, Platform

Evolving a pension administration eco-system

It would be fantastic if all these services could be delivered in one place by one supplier – but for real, practical reasons, schemes need to rely on a range of different suppliers to meet their needs.

It would also help if the different suppliers were all used to working collectively, to provide a best-in-breed solution, where straight through processing and integrated systems worked seamlessly together.

The perfect pension administration eco-system is gradually emerging, like the butterfly from its chrysalis, and at Mobius Life we’re helping to nurture this process. Our wide range of client relationships and expertise in collaborative working across the spectrum of service suppliers to pension schemes, means we’re perfectly placed to enable the eco-system to thrive.

We already work closely with all the key providers involved in delivering workplace pension solutions. These include consultants, investment managers, member administration specialists, data and reporting analysts and governance experts. As well as bankers, technology and website suppliers, scheme accountants and member communication professionals.

And because we’re working collaboratively with these suppliers all the time, we know how they operate and we have developed our capabilities to integrate with theirs, making life easier for our clients.

So, the perfect pension administration eco-system may not be fully formed yet – but at Mobius we’re working to help the industry evolve, to deliver better and more efficient holistic solutions to sponsors and in turn improve member outcomes.

And of course, all of this helps to meet the regulators’ requirement that schemes deliver measurable value for money.
If you would like to discuss how the pension administration eco-system might develop and grow, please let us know. We’d be delighted to hear from you.

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James Finch, CEO | Mobius
Platform, Defined Benefit, Pension Strategy

Accessing alternative credit on-platform for DB schemes

The shift from traditional bank lenders as a result of tightening regulation since the global financial crisis, has resulted in the financing gap being filled by capital flows from private credit funds. It is a significant and growing market, driven largely by the search for higher yield. S&P Global reports the AUM of funds principally involved in direct lending grew to $412 billion by the end of 20201.

Typically, alternative credit involves non-bank institutions making loans to private companies. These businesses borrowing in the alternative market are usually mid-market private companies who struggle to access traditional bank finance. However, the expansion of private credit has resulted in a wide range of sub-asset classes covering direct lending, leveraged loans, distressed debt, securitised credit, consumer finance, real estate and infrastructure debt.

Private credit funds must undertake rigorous due diligence before investing, and as lending is privately negotiated, managers will generally seek seniority and stronger covenants. These allow investors to access higher yielding opportunities while mitigating some of the associated risks. The problem for many DB schemes however, particularly small to mid-size ones, is how to access and implement alternative credit funds. Investing requires significant levels of governance, the funds can also be illiquid with unique fund structures, and high minimum investment limits restrict access to only the largest schemes.

Now, Mobius has made a range of alternative credit funds available to DB schemes of all sizes on our platform. All the governance is undertaken at the platform level, meaning schemes do not have to jump through numerous governance hoops and cumbersome account opening documentation. Mobius takes on the implementation of these illiquid assets to manage the infrequent dealing cycles and valuations.

All implementation is carried out by Mobius, as we accommodate the complex dealing terms associated with the asset class.

Many DB schemes and their advisers can see the investment potential offered by alternative credit. Now the opportunity is available to far more schemes, thanks to the scale and flexibility of the Mobius platform and the continued investment in our infrastructure. If you want to know more, please get in touch.

  1. S&P Global: Private Debt: A Lesser-Known Corner of Finance Finds the Spotlight.
    https://www.spglobal.com/en/research-insights/featured/private-debt
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Mobius team having a discussion | Mobius
Innovation, Platform

The platform solution to VFM reporting for DC schemes

We all want to see excellent value in DC schemes – as the regulators say, it is a critical contributor in maximising the income savers have at retirement. But measuring, reporting and comparing VFM metrics could present some DC trustees with challenges.

And the existing reporting burden is only getting larger. VFM has been expanded beyond costs and charges to include additional metrics such as net performance reporting. No doubt more metrics will appear over time. This creates a further need for trustees to have access to sufficient information on the assets making up their default and self-select funds.

Of course, it’s not just about measurement – the real benefit is delivering and continuously improving VFM for members on multiple fronts. The key is having accurate, relevant and consumable data. For trustees, much of this data comes from fund metrics. Here at Mobius, we are committed to supporting DC schemes’ governance and oversight needs by providing our clients with the data they need.

Take the regulators’ requirement that members’ savings are not eroded by high costs and charges. Our tools enable trustees to access accurate transaction cost reporting at both a scheme and fund level, providing aggregated costs at a blended level, together with an attribution of those costs.

The regulators also want to see performance data available net of costs – to help trustees and members understand and compare the real returns they are achieving. Our tools deliver reliable information either to feed into performance engines, or to create net performance data. Again, this is available at a blended level and for the individual funds which make up the blend.

Critically, the regulators recognise well-designed default arrangements are essential in delivering VFM. Using the Mobius platform, trustees can configure default funds designed to meet their exact requirements, whether this is by blending existing funds, or by manufacturing a bespoke strategy from scratch.

And of course, for schemes using our target date fund blending capability, or lifestyle model portfolio approach, we can supply performance data by age cohorts – as proposed in the discussion paper. This means trustees can understand the actual returns their members are receiving, based on their age and time to retirement. It’s good to be ahead of the curve!

We can also help trustees to understand and report on important metrics such as ESG and TCFD/climate – which were highlighted in the discussion paper as a critical long-term driver of VFM.

It’s clear from the regulators’ discussion paper they want to see a common framework and transparency in VFM reporting. Using the Mobius platform trustees will be able to access the data they need to meet emerging VFM requirements. One less thing for trustees to worry about. If you want to know more, please get in touch.

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Children playing with building blocks | Mobius
Innovation, Investment Strategies, Platform

Providing the building blocks for more parties than you think

A new standard of platform is needed to take advantage of these developments. And that’s where Mobius comes in. We provide the investment administration expertise, coupled with the flexibility to innovate, to enable our partners to power their solutions.

As a minimum you should expect your platform provider to support:

  • Investment administration
  • Transition management designed to minimise cost and out-of-market risk
  • Rebalancing and switching
  • Manufacturing blended funds with multiple hierarchies
  • Life-wrapping funds
  • Daily scheme valuations

Let’s take a snap shot of the more advanced capabilities we offer to DB and DC schemes, master trusts, superfunds, fiduciary  managers and asset managers:

  • Smart-rebalancing to fully automate and simplify rebalancing
  • Executing de-risking strategies and trigger-point monitoring
  • Manufacturing more sophisticated structures including illiquid asset classes
  • Zero-fee index funds
  • Structured equity solutions
  • Income-paying funds
  • Specialist funds range
  • Life company outsourcing
  • Target date funds
  • To-and-through retirement solutions
  • ESG reporting
  • Cost disclosure reporting

Can your platform do that?
We also bring the advantage of an independent perspective (see this recent post on independence). We are the UK’s largest independent institutional investment platform, so we are completely agnostic to solutions, asset managers and consultants. This means we can deliver best in class solutions without compromise.

And don’t forget, all of our services are available within a life company wrapper and as stand-alone non-life solutions. That means we can also serve asset managers and other organisations such as mutuals and friendly societies. Whatever our clients’ objectives, we provide the investment administration building blocks to help them succeed. If you’d like to find out more, call us today.

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Silhouette of traveller by water with sunset | Mobius
Platform, Investment Strategies

Why independence is essential in the platform world

There are now a number of players in the market, each with different ownership and business strategies. Sitting at the centre of this market, we believe Mobius is the only one that can claim genuine independence from the potential conflicts of other ownership models.

We all know there are platforms owned by major asset management groups. Clearly this offers the advantage of big brand name backing and financial strength. But as far as I can see all asset manager-owned platforms require their clients to hold at least some of their assets in ‘house’ funds.

How can it be in the best interests of clients to have to hold one manager’s funds when there may be alternative strategies out there which better meet the clients’ needs? Using an asset manager-owned platform obviously constrains the consultants’ ability to advise on ‘best-of-breed’ funds in every sector.

Other platforms are owned by global pension and investment consultants. I suspect they argue it is efficient to have advice and investment administration all in one place. But with the regulator already looking at conflicts in the consultancy sector, surely this is another potential area of risk? What’s more, do trustees really want all their eggs in one basket?

Come to that, do other UK pension and investment consultants want to recommend their competitor’s platform to their own clients and face the fear, real or imagined, of poaching?

We can also look at the model of platform ownership by industry aggregator. Here there can be the appearance of a lot of assets on the platform – but in effect these are largely ‘in-house’ clients. Do small and medium pension schemes really want their assets on a platform of an owner whose business model is to grow bigger by aggregation – and isn’t there the risk that they are just a small fish in large and potentially homogeneous asset pool?

There’s also the question of big corporate ownership. Do we seriously believe that the platform is the number-one priority of global financial services players? Will they put their platform business ahead of other major areas of the business? Will the platform be first in line for investment for the latest technology? Will the brightest and best in their management structures see the platform business as their best career move?

That’s why we believe independence is critical at Mobius. We are completely agonistic about fund choice. If a consultant advises a scheme to use a specific fund or strategy, we can make it available to them – irrespective of asset manager. We can also quickly blend funds to make bespoke strategies available to schemes. We’re also completely independent of consultants, which means we can focus all our attention on offering excellence in investment administration, without perceived conflicts of interest, or a potential bias towards ‘house’ clients over those introduced by other consultants.

We’re also completely independent of big-business lack of focus. Our platform is our only business – we are focussed solely on our platform clients, rather than a myriad of other group businesses. Our platform benefits from investment in the latest technology. Our brightest and best, senior management and the whole team are 100% focused on delivering investment administration services every day – so our clients get our full attention all the time.

Some may claim Mobius is a relatively small business, so cannot offer the financial security of other platforms with bigger owners. Well let’s dispatch that argument straight away. We are a UK regulated life company – and have been for nearly quarter of a century. That means we are operating successfully in one of the best and most tightly regulated financial services jurisdictions in the world.

We are required by our regulators to hold sufficient regulatory capital to meet all of our liabilities. And guess what – we hold more regulatory capital than we need, simply to provide extra security for our clients. We also administer over £23 billion of assets on the platform for our clients, giving us real influence and fire power in the industry.

And don’t just take our word for it. The independent industry judges at the UK Pensions Awards have recognised Mobius as the best institutional pension platform in the market in 2019 and 2020.

So in summary, there are three key things that make Mobius really different from other institutional platforms; independence, independence and independence.

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Joshun Sandhu, Head of Investment Solutions & Partnerships | Mobius
Platform, Innovation, Investment Strategies

Getting to grips with ESG reporting

The government has recently consulted on plans which will require schemes with more than £5 billion in assets to publish disclosures on climate-related risks from October this year. These requirements are expected to filter down to smaller schemes with over £1 billion in assets from next year.

This comes on top of existing requirements for trustees to report on their Environmental, Social and Governance (ESG) investments.

Since October 2020 all trust-based pension schemes with more than 100 members have been required to publish an annual implementation statement which sets out how they acted on the principles set out in their Statement of Investment Principles (SIP). This must include schemes’ policies in relation to ESG considerations, such as climate change.

While reporting on ESG investments is in principle relatively straightforward for trustees, the devil is in the detail. Schemes have multiple fund managers – all of which will have different approaches to ESG investing, so trustees will need to collate several layers of information from multiple sources.

This includes, for example, whether their managers have ESG or climate change policies and if so, how these policies are integrated into their investment process. Do they engage with the senior management of companies whose shares they hold to influence their behaviour? Do they use their vote to influence how companies act? These and numerous other ESG-related questions need to be answered and reported on if trustees are to meet their implementation statement responsibilities.

This is coupled with the reality that whilst the asset management community states it is committed to the principles of ESG investing, it is still coming to terms with meeting the detailed information required for implementation statements.

That’s why Mobius has recently launched an ESG reporting service for our pension scheme clients. As all our clients’ assets are held in one place on our platform, we are perfectly positioned to gather this information from managers. The resulting report collates asset managers’ ESG themes – set out in a way which helps trustees complete their implementation statements.

The Mobius service is designed to help trustees contextualise the approaches of asset managers and to help them understand how the scheme assets are being invested. This would otherwise be a time-consuming and onerous task for them to complete.

It’s just one more example of the benefits to schemes of holding their assets on the Mobius platform.

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