first_imgAsset managers hold the key to ensuring pension schemes get value for money from the market, according to Chris Hitchen, chief executive at RPMI, although other panellists at the PLSA investment conference in Edinburgh said all agents – including trustees – had a role to play.The headline theme for the panel was the Financial Conduct Authority’s asset management market study, which the FCA launched in November last year, and whether the market was working for pension schemes.Tracey McDermott, interim chief executive at the FCA, said asset management was “one of the UK’s success stories”.But she said there was “no room for complacency” and that, as new regulations drove more consumers to engage with asset managers, it was of “enormous consequence that they receive maximum bang for their buck”. The market study is “a serious and wide-ranging exercise”, she said.The FCA’s next steps include a survey of institutional investors to get a picture of how purchasers of asset management services view the market, and “a comprehensive programme” of international comparison work, McDermott told delegates.Her overview set the scene for a panel discussion during which market participants passed around to different players the responsibility for ensuring that end investors get value for money.RPMI’s Hitchen said transparency was helpful but that it was not enough.He said asset managers were “the part of the investment chain that we are looking to to really help us get the best deal”, not least because they have the most resources out of investment consultants and end investors.“Fund managers are where the resources are, where the pools of assets are,” he said.“And most trustees in the room are probably looking to their asset managers to be their guardians in the market.”He highlighted problems in the asset management industry such as closet indexing and “a lot of competition using alpha”, but he also pointed to investors’ “atomised portfolios” as a shortcoming – “we’re all massively over-diversified”.Pension schemes can take steps themselves, too, noted Hitchen, pointing to Railpen’s having simplified its external manager arrangements and hired a full-time member of staff to monitor fees.The latter was a decision taken after a “forensic look” at its fees revealed the scheme was paying four times more than it thought it was.BlackRock’s Stephens accepted that asset managers were part of the solution, but he emphasised the need to differentiate between costs and value for money, and also passed responsibility to other market participants, including trustees.Trustees make some of the most important decisions that will affect costs and value for money, he said, with asset allocation by far the most important thing to get right.“Are trustees spending as much time on asset-allocation decisions as they are on manager selection?” he asked.“How thoroughly, how consistently, how frequently are trustees evaluating their advisers and the advice they are given? How easy do we providers make it for our clients to assess us?”Three conditions need to be met for there to be effective competition, which is good for trustees, he said.First, there needs to be choice, and second, those choices need to be differentiated.Third, “and the one I think is less often spoken about, is the willingness of clients to choose, to make change”.Inertia, said Stephens, was “one of the things that has got us into the situation we’re in”.That situation, according to Stephens, is one where “the average hedge ratio is 40%, where most pension schemes are able to liquidate huge swathes of their portfolio within a week or a month, thereby ignoring attractive illiquidity premia, where adviser appointments seem if not permanent then extremely long term, and where clients extend advisory mandates into asset management mandates without open tender.”A consultant’s view came from Robert Brown, chairman of the global investment committee at Willis Towers Watson, who said progress was needed in several areas, not just on costs, and that it was “incumbent” on every bit of the chain to pursue improvement.With returns low and risks high, investors “have to pull every lever available to them” to increase returns, he said.As to the structure of the industry, “the decision chain is full of agents”, all of whom are subject to potential conflicts of interest, and this needs to be managed, he added.Costs, meanwhile, are increasingly accepted as being too high despite the market’s being competitive, noted Brown, with this down to structural factors such as information being asymmetric and buyers of asset management services being quite fragmented, and therefore weak buyers.Aggregation, as has happened in Australia, could be a way of dealing with the latter problem, he said.Innovation, another area to consider, has brought some good and some bad changes, said Brown, although the associated rise in complexity of investment products has typically meant higher fee levels.Finally, according to Brown, the “relentless” increase in competition for resources, returns and talent, not to mention complexity, has driven the need for greater governance and more management resources to deal with this.“Now, more than ever, we need to make progress in all of these areas,” he said.last_img read more


first_imgMountain climber Ross Miller in action.RESPECTED Brisbane mountain climber Annette Miller sold her family home at auction on Saturday, nine years after losing her husband in a mountain climbing tragedy at Mt Lindesay on the Queensland/New South Wales border.25 Tamarang Street, Tarragindi.Mrs Miller was the first woman to climb Mt Tinbeerwah near Noosa on the Sunshine Coast and her husband Ross Miller was a professional rock climber with more than 20 years’ experience.Annette Miller at the auction of her Tarragindi home of 25 years.“Mountain climbing is about being out in nature, you forget everything except that square metre of rock in front of you and above you and it’s the challenge of whether you can ‘work the rock’,” Mrs Miller said.“And to do it with someone, like a soulmate or even a good friend, it’s an amazing experience because you’re both dependent on each other and your life is quite literally in the other person’s hands, there’s a lot of trust involved.”25 Tamarang Street, Tarragindi is also 46 O’Neil Street, Moorooka as it has a two-street frontage and is positioned at the boundary of two suburbs.Their four-bedroom, architect-designed home at 25 Tamarang Street, Tarragindi is on a 45 degree slope next to Toohey Forest Park and is packed with memories from a lifetime of hiking and climbing together.“It’s taken me a long time to get to this point where I felt I could let go of the house,” Mrs Miller said. “Ross and I pretty much had our whole relationship here … he did all the gardening and he also built the rock climbing wall downstairs,” she said.Great views from the deck.Place Graceville agent Karen Simons took the 1980s-built, three-level home to auction with two active bidders but a vendor bid of $850,000 was needed to break the ice.Architect Leon Burton raised the bid to $900,000 and after a short volley of bids the house sold to Mr Burton for $1.075m.“There’s not that classic street appeal but internally, it’s like a chalet,” Mr Burton said of the 1499sq m property.Built like a Swiss Chalet.“We’re not quite as adventurous as (Ross Miller) was but we are very active and we love bushwalking and we did notice the rock climbing wall. We might set that up.”More from news02:37International architect Desmond Brooks selling luxury beach villa7 hours agoParks and wildlife the new lust-haves post coronavirus8 hours agoMrs Miller has continued hiking and will travel to the Scenic Rim on the school holidays to be the Girraween National Park camp host.“You meet and greet campers and give them advice on where to go through the national parks,” she said.Annette and Ross met in 1990 while on a three day hike near Cunningham’s Gap in 1990.Their outdoor interests expanded to include cycling, skiing, rogaining, mountaineering and rock climbing.Their honeymoon in 1996 was a 20-day bushwalk in the spectacular West McDonnell Ranges in the Northern Territory, including the world-famous Larapinta Trail.The Larapinta Trail in Central Australia.FOLLOW US ON FACEBOOKlast_img read more