Why independence is essential in the platform world

01 April 2021

Adrian Swales Chief Executive Officer

Author

Adrian Swales
Chief Executive Officer

Adrian Swales discusses the advantages of independence in the institutional investment platform market.

We talk a lot about our independence at Mobius Life - but is independence really that important and what value does it add to our pension fund clients? In fact, we think independence is critical in the institutional investment platform market and I think it’s worth taking some time to set out exactly why this is the case.

There are now a number of players in the market, each with different ownership and business strategies. Sitting at the centre of this market, we believe Mobius Life is the only one that can claim genuine independence from the potential conflicts of other ownership models.

We all know there are platforms owned by major asset management groups. Clearly this offers the advantage of big brand name backing and financial strength. But as far as I can see all asset manager-owned platforms require their clients to hold at least some of their assets in ‘house’ funds.

How can it be in the bestinterests of clients to have to hold one manager’s funds when there may be alternative strategies out there which better meet the clients’ needs? Using an asset manager-owned platform obviously constrains the consultants’ ability to advise on ‘best-of-breed’ funds in every sector.

Other platforms are owned by global pension and investment consultants. I suspect they argue it is efficient to have advice and investment administration all in one place. But with the regulator already looking at conflicts in the consultancy sector, surely this is another potential area of risk? What’s more, do trustees really want all their eggs in one basket?

Come to that, do other UK pension and investment consultants want to recommend their competitor’s platform to their own clients and face the fear, real or imagined, of poaching?

We can also look at the model of platform ownership by industry aggregator. Here there can be the appearance of a lot of assets on the platform – but in effect these are largely ‘in-house’ clients. Do small and medium pension schemes really want their assets on a platform of an owner whose business model is to grow bigger by aggregation – and isn’t there the risk that they are just a small fish in large and potentially homogeneous asset pool?

There’s also the question of big corporate ownership. Do we seriously believe that the platform is the number-one priority of global financial services players? Will they put their platform business ahead of other major areas of the business? Will the platform be first in line for investment for the latest technology? Will the brightest and best in their management structures see the platform business as their best career move?

That’s why we believe independence is critical at Mobius Life. We are completely agonistic about fund choice. If a consultant advises a scheme to use a specific fund or strategy, we can make it available to them – irrespective of asset manager. We can also quickly blend funds to make bespoke strategies available to schemes. We’re also completely independent of consultants, which means we can focus all our attention on offering excellence in investment administration, without perceived conflicts of interest, or a potential bias towards ‘house’ clients over those introduced by other consultants.

We’re also completely independent of big-business lack of focus. Our platform is our only business – we are focussed solely on our platform clients, rather than a myriad of other group businesses. Our platform benefits from investment in the latest technology. Our brightest and best, senior management and the whole team are 100% focused on delivering investment administration services every day – so our clients get our full attention all the time.

Some may claim Mobius Life is a relatively small business, so cannot offer the financial security of other platforms with bigger owners. Well let’s dispatch that argument straight away. We are a UK regulated life company - and have been for nearly quarter of a century. That means we are operating successfully in one of the best and most tightly regulated financial services jurisdictions in the world.

We are required by our regulators to hold sufficient regulatory capital to meet all of our liabilities. And guess what - we hold more regulatory capital than we need, simply to provide extra security for our clients. We also administer over £23 billion of assets on the platform for our clients, giving us real influence and fire power in the industry.

And don’t just take our word for it. The independent industry judges at the UK Pensions Awards have recognised Mobius Life as the best institutional pension platform in the market in 2019 and 2020.

So in summary, there are three key things that make Mobius Life really different from other institutional platforms; independence, independence and independence.

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Mobius Life Limited 7th Floor, 20 Gresham Street, London EC2V 7JE
t: + 44 (0)20 7847 3300 f: + 44 (0)20 7847 3399 w: www.mobiuslife.co.uk
Mobius Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales at: 7th Floor, 20 Gresham Street, London, EC2V 7JE. Registered No. 3104978. For your security telephone conversations may be recorded.

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