A clear commitment to independence is a powerful differentiator in the world of workplace pensions consultancy, says Barnett Waddingham head of platforms and engagement Julia Turney. John Greenwood hears why
As it adapts to the fast-changing world of workplace pensions and benefits, Barnett Waddingham is putting a commitment to independence at the heart of its value proposition.
“We are very keen to be seen as a truly independent consultancy,” says head of platforms and engagement Julia Turney.
“We do not want to be seen as selling a particular piece of software, our own master trust or some form of blended fund investment option. This is because we think the way to truly add value for our clients is to be able to offer best-of-breed.
“We have made a conscious decision to remain whole-of-market, not just for pension but also for other benefits.”
Barnett Waddingham has adapted its range of services to reflect the changing pension environment and the opportunities and challenges of the Budget 2014 pension freedoms. Its online valuation tool, Illuminate, has been improved to offer new functionality to enable trustees and employers of DB schemes to model pension increase exchange or enhanced transfer value exercises. Schemes can now also track changes in buy-in/buy-out pricing.
On the DC side, Barnett Waddingham’s GEM – Governance, Engagement, Monitoring – pension analytical tool helps employers and trustees to monitor scheme structure, project performance and benchmark the scheme against industry averages, auto-enrolment legislation and the pension quality mark criteria. “This segmentation process enables us to identify which groups are coming up to retirement, who has a shortfall and what their options are,” says Turney.
The consultancy, which deals only with employers and trustees but not employees, offers three levels of service. Its Pearl option is delivered largely by telephone and comes with one meeting a year, a governance report and a streamlined structure – an option that can appeal to organisations looking to trim costs as they move away from trail. The ‘business as usual’ option offers a more extensive service while the premium bespoke option is for employers that want full analytics of their benefits and pension requirements.
The Barnett Waddingham platform is non-transactional – reflecting the firm’s commitment to independence.
“We educate employees to the point where they can model what they can do at different ages,” says Turney. “This gets them to a stage where they can come up with a plan and – depending on what the employer has put in place – it signposts them towards a particular outcome. However, we have stopped short of tying up with a particular partner for these recommendations as this would not sit with our independence position.”
Turney sees the increased regulatory focus on governance translating to an increased demand from HR professionals for services that deliver higher levels of engagement, although uncertainty prevails about how that can be achieved.
“There is a big focus on engagement at the moment but it is not clear that HR directors fully understand what is meant by engagement. We are getting requests to be able to communicate all the advice we give them at a corporate trustee level to the workforce. We’re also getting member engagement and default investment engagement requirements. This is all part of the increasingly important governance piece,” says Turney.
But Barnett Waddingham is also increasing its financial education provision in response to customer demand. “Financial education is an increasingly hot topic. Yes, employers want to see employees saving for later life, but there is also what they have to do for now, like house purchase and other things. We think technology needs to accommodate that. We can’t simply ask people to save only for retirement,” says Turney