The platform solution for master trusts

Rapid consolidation of master trusts and an increase in the sophistication of their investment strategies is leading to a greatly increased demand for platform-based investment administration services.

The Pension Regulator introduced new regulation for master trusts in 2019. This led to 53 of the 90 master trusts exiting the market or transferring their membership to other master trusts, leaving 37 authorised schemes.

Over 16 million peoples’ pension arrangements are managed by master trusts which hold more than £36 billion in assets.

Master trusts’ greater strength and liquidity is seeing a burgeoning demand for more sophisticated investment strategies as they work to meet their members’ retirement income expectations. We’re seeing a greater demand for ESG and impact investing strategies, with 88% of master trusts offering an ESG choice under self-select options for members, according to recent research by Natixis.

Positive cash flows and greater liquidity means many master trusts are looking at illiquid investments, such as property, infrastructure or private assets to gain advantage of diversification and the ‘illiquidity premium’. Natixis’ research showed more than seven out of ten master trusts are likely to invest in illiquid assets in due course.

This increased sophistication and size of master trusts means they need a flexible, responsive and robust approach to investment administration and many are turning to Mobius Life to meet their needs:

• We currently provide platform services to around 20% of the master trust market.
•  The Mobius Life platform offers many advantages to master trusts. We’re completely independent of investment consultants and asset managers, which means we can offer a complete range of funds.
• We have invested in our platform technology so we can hold illiquid and other funds on the platform which are not priced daily – and we can report effectively on these assets to trustees and their advisers. It seems some other platforms don’t have similar technology capabilities.
• We can also help master trusts to invest in sophisticated funds and strategies with high minimum investment limits. Our ability to aggregate holdings gives schemes access to these alternatives on a cost-effective basis.
• Our advanced reporting capabilities means we can provide master trusts with detailed reports at an employer-level basis. This means each employer can see how their schemes’ funds are performing at any stage.

Master trusts are a large, rapidly growing and important component of the UK’s DC pension infrastructure. Mobius Life has the capabilities and expertise to deliver the investment administration services they need to meet their members’ needs on a daily basis.