By Jenne Mannion Hermes Liberty is looking to target stakeholder pensions services at affinity group...
By Jenne Mannion
Hermes Liberty is looking to target stakeholder pensions services at affinity groups, large employers and trustees of occupational pensions schemes.
The group is the result of a strategic alliance between Hermes Investment Management Limited (Hermes) and Liberty International Pensions Limited (Liberty Pensions Services). It hopes to build up products and services using as a base Hermes' experience of running domestic and international tracking funds and Liberty Pensions Services' background as a defined contribution pensions administrator.
The recent launch of six new tracking funds has provided Hermes Liberty with the ability to provide a range of investment options at what it believes to be highly-competitive prices required for stakeholder market. Those portfolios include index tracker funds for Europe, US, Japan, Pacific, UK Long Gilt and UK Index Linked Gilts. The group already has a UK fund.
These products, aimed at the stakeholder market, will run alongside an existing range of funds aimed non-stakeholder schemes. Robert Noach, head of sales and marketing at Liberty Pensions Services, said: "One of the capabilities is customised asset allocation, or there is the option of lifestyle default, where the person doesn't want to select their own asset allocation. This lifestyle option means starting with equities earlier in the scheme and switching to the lower risk cash and gilt type funds nearer retirement."
It also offers the ability for affinity groups, employers and trustees to customise their investment allocations according to the risk profile of their memberships.
Noach said Hermes Liberty hopes to attract schemes of all sizes into its product range, both directly and through fee paying IFAs. He said this product is more likely to attract large rather than smaller employers, with companies with a lower amount of lives tending to opt for retail brands while bigger companies, for example, 500 to 10,000 lives, may opt for larger, more institutional players
Noach said: "Stakeholder pensions require new level of administrative competence to ensure that all the Government's requirements can be met within the 1% charging cap. The combination will place us amongst the forerunners of stakeholder providers in the market. Our alliance with Hermes allows us to combine cost effective administration service with high value investment management."
Anthony Esse, marketing director of Hermes, said: "Our strong index-tracking record is perfect for the stakeholder market because it keeps costs to a minimum. Members are protected further by our low tracking error and strong approach to corporate governance. These strengths are well complemented by the quality of administration that Liberty Pensions Services will provide."
Hermes Liberty was established in 1997 as an insurance company and a wholly-owned subsidiary of Liberty International Pensions to be a specialist provider of pooled index tracking funds. Current funds under management are £3.2bn.
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