Custodians and Pension Funds
The pension fund custody marketplace tends to be dominated by a small number of large organisations. Fund custody arrangements, in my experience, tend to be near the end of the list of relationships that pension funds prioritise for review. This has, historically, meant that custody reviews have been undertaken relatively infrequently.
For Local Government Pension Scheme (LGPS) Funds in England and Wales, a Custody Framework Agreement is in place, which represented a 'bulk buying power' approach to the procurement of global custody servicers. This Agreement created an opportunity for some less well known custody providers to present their credentials, and for existing key players to refresh and refocus their offerings. The Framework Agreement has been used by a number of Funds, as it presented an opportunity for LGPS Funds to change custodian more easily, keeping all parties on the Framework Agreement on their toes, and focussed on services provided and customer satisfaction.
With the planned asset pooling changes for LGPS Funds in England and Wales currently being implemented, radical change relating to the custody arrangements of that section of the UK pensions market is underway. What the final position looks like is unclear at the moment.
How can 330 Consulting help custodians in such an environment?
During my career, I have accumulated a great deal of custody, investment accounting and public procurement-related knowledge from my time spent in the private sector, LGPS environment, and also from working with clients whilst in the investment consulting industry.
Whilst at Aon, I headed up the specialist custody research team in the UK for over 3 years. I have also spent many years both preparing Requests for Proposal (RFP) / Request For Information (RFI) questionnaires for custody searches on behalf of pension funds, and also reviewing the written submissions from custodians for such new business opportunities. This puts me in the rare position of having seen the custody procurement process from both sides.
As a result, I am well qualified to provide advice and guidance on developing strategy for the UK pension scheme and LGPS 'pooled asset' markets, helping to identify potential opportunities, and also to assist organisations with analysing the content of any RFPs/RFIs for custody services as and when they are sent out by pension funds, to help create a response that meets the potential client's expectations. Advice of this nature will, I believe, result in a greater chance of connecting in a meaningful manner with prospective pension fund clients.
I have also participated in, and assessed, new business presentations made by custodians to pension funds and investment consultants, and also (on occassion) in the more formal Pensions Committee setting. Again, I am well positioned to help your organisation prepare effectively for any final interviews to which you are invited, or site visits that potential clients may wish to make. Services provided include:
- assistance at all stages of the RFP/RFI process
- commenting on your proposed presentation material
- providing suggestions on the best layout of content
- helping prepare any PowerPoint presentation material
- participating in mock final pitch interviews with your staff
- attending any client site visit to provide a link between technical custody staff and the potential client
In this way, you can ensure your organisation has the best chance of success throughout the process, and on the final presentation day.
During my career, I've spent a significant amount of time working on the investment accounting and performance measurement aspects of pension funds' arrangements, in addition to the investment management and investment consulting areas. I also have a very strong focus on delivering first rate customer service.
- As a result, I'm able to help custodians in a number of additional areas. Services provided include:
- assisting with internal projects across a wide variety of accounting,
- safekeeping, and reporting topics
- reviewing and creating client communications
- designing and running client events / workshops
- client relationship activities
I'm also happy to consider other activities that are not specifically listed above, so do please get in touch with any questions you might have on my services.