Platforum: Winning in the high contributions space

Rodolpho Rivera from Platforum, Centaur. Photo by Michael Walter/Troika

A strong at-retirement offering means Fidelity can provide high-end employers with a comprehensive DC proposition, says Platforum quantitative researcher Rodolfo Crespo

This month we take a look at Fidelity, which has been offering a DC solution since 1994.

With £22bn in workplace savings AUM at the end of H1 2015, Fidelity is the biggest fund manager in this space. Despite having offered a direct platform for as long as anyone in both the UK and US markets, it currently has decided against providing a fully integrated platform in the workplace.

The proposition is characterised by a series of components for employers to offer according to needs. Investment services, including investment Isas, are provided in conjunction with pensions or as a separate service.

Fidelity targets larger firms typically with higher member contribution rates, including offshore companies (such as in the oil and gas and energy sectors), and distribution is mainly via EBCs and direct to the large employers.

The online portal for members, PlanViewer, was launched in 1995 and has included access to third-party funds since 2003. Group stakeholder pension was added in 2004 and the DC investment-only platform launched in 2006. Corporate Isa has been offered since 2010 and an auto-enrolment solution, Workforce Management, was launched in November 2011.

A master trust is available – Fidelity Master Trust is governed by a trustee board that meets the independence requirements defined by the DWP in having extensive knowledge, insight and experience within the pensions and finance industry. It can accommodate clients with their own governance function to complement the master trust board if required. As part of the master trust proposition, an ‘off the shelf’ restricted fund range is offered, which covers all major asset classes and management styles and includes FutureWise as the default investment option. A bespoke fund range and default solution can also be accommodated with independent advice. Fidelity has fewer assets invested in its default fund than the industry average – between 60 per cent and 70 per cent, compared with more typical percentages of 80–90 per cent.

The acquisition of Annuity Direct in 2014 enabled Fidelity to steal a march on some of its competitors by getting a retirement service in place nine months before the implementation of the pension freedoms. Fidelity Retirement Services offers both guidance and advice for scheme members coming up to retirement.

Fidelity has a full range of support services to build engagement with scheme members, including workplace seminars, one-to-one sessions, online planning tools, client-specific videos, webcasts and webinars. An important part of the engagement offering is the online portal for scheme members to view their retirement savings account, PlanViewer. Other sources of content available to scheme members include information libraries, guides to investing and making sense of retirement, and myfuture magazine, which can also be accessed via iOS and Android apps. Some of the retirement tools offered to its D2C clients through Fidelity Personal Investing are also available.

When we gathered views on providers from advisers and employers, Fidelity came second  highest after Royal London. It was highly rated as a provider able to cater to more sophisticated employers that want greater flexibility. Although only very large employers can afford to offer bespoke default funds, Fidelity was deemed well placed to provide this service by advisers.

Fidelity has a formidable workplace savings proposition despite currently not providing a full-blown workplace savings platform. With AE democratising long-term saving, we will see if it pushes further down this route.

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