One of the most consistent themes in institutional investment is the search for efficiency. Pension schemes and other long-term investors want access to high-quality investment strategies at low fees, without leakage through tax, transaction costs or unnecessary administration. They also want to avoid governance burden and operational risk. Scale is the lever that makes this possible.
Fiduciary managers often emphasise the scale benefits they can bring to smaller pension funds. But investment platforms can unlock the same advantages – whether appointed directly by trustees, through a fiduciary manager, or as part of an implemented consulting solution.
By aggregating mandates across multiple clients, both fiduciary managers and platforms can negotiate significant discounts from asset managers. Those savings are passed through to schemes, meaning that small and mid-sized schemes can access institutional pricing typically reserved for the largest investors.
The benefits go beyond cost. Investment platforms deliver operational efficiencies by handling trading, rebalancing and transitions, providing consolidated reporting, and reducing the complexity of managing multiple counterparties. For trustees, this means less time spent on administrative detail and more time focused on strategic questions. For managers, it means a more efficient route to market and reduced need for bespoke client-by-client solutions.
Pooling also helps to manage risk. Fragmented arrangements leave more scope for delays, mismatched trades or reporting errors. A single investment platform reduces these risks, enabling schemes to meet fiduciary and regulatory obligations with greater confidence. Aggregating investors also makes it possible to access strategies with high minimum allocations, and to use fund structures that minimise tax drag – for example, reducing withholding tax on overseas equities. And by bringing together investor activity, platforms can lower transaction costs by crossing trades and avoiding bid/offer spreads.
Importantly, the value of scale is amplified when combined with open architecture. Schemes should not have to compromise on manager selection or asset class exposure. An open-architecture investment platform enables trustees and fiduciary managers to choose from the full universe of strategies, whether mainstream equity and bond mandates, specialist sustainable funds, or innovative private market allocations. This flexibility ensures that scale savings do not come at the expense of investment choice, but instead broaden the opportunity set available to members.
A life wrap structure takes this further by integrating diverse investments into a single, efficient framework. Life wraps allow schemes to combine pooled funds, segregated mandates and alternative assets under one tax-efficient structure. That brings consistency to pricing, simplifies reporting and governance, and makes it easier to evolve portfolios as member needs change, for example, shifting from accumulation into decumulation without operational disruption. For trustees, it means clear oversight and reduced administration. For members, it means potentially smoother more predictable investment journeys and the potential for better long-term outcomes.
There is no one-size-fits-all model. Some schemes will continue to see value in giving fiduciary managers full discretion. Others will prefer to retain strategic control and work with an adviser. The important point is that in either case, the benefits of scale are available when an investment platform is used for implementation. Fiduciary managers can focus on strategy and governance, while the platform delivers efficiency and scale. Equally, advisers and trustees can work directly with the platform, retaining control but still gaining institutional pricing and operational strength.
This complementarity makes the investment landscape more flexible than ever. A small scheme can use a fiduciary manager and still benefit from investment platform implementation. A larger scheme, with in-house expertise, can retain manager relationships while accessing pooled terms through a platform.
Ultimately, the lesson is clear. When pooled intelligently, scale reduces costs, strengthens resilience and improves outcomes. And when combined with open architecture and a life wrap structure, it also delivers choice, transparency and adaptability. The challenge for trustees is to decide how best to capture those benefits within their governance framework. Whether through a fiduciary manager, an investment platform, or both, the opportunity exists to enhance member outcomes by aligning cost efficiency with operational excellence.
As fee structures evolve and schemes mature, the ability to harness scale without sacrificing flexibility will only grow in importance. The key is recognising the full range of options now available, and making the most of the economies of scale accessible to schemes of every size.