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Schroders stakes its claim

Schroders became one of the first major fund managers to register to become a stakeholder pension provider in January.

It brings to the marketplace a unique combination of a back-office admin track record, courtesy of Liberty Pensions, and a homegrown asset management reputation.

Having registered with the Occupational Pensions Regulatory Authority, Schroders Pensions will go live with its first stakeholder product in April when stakeholder is launched, joining the dozens of life office providers hoping to tough it out in the crowded stakeholder marketplace.

So what are Schroders Pensions offering in this well publicised margin-tight environment where companies are fighting hard to differentiate themselves against capped charges?

Schroders says it will be marketing its stakeholder scheme as part of its package of defined-contribution services and, true to its existing client focus, will target medium to large companies.

It says the decision to launch into the stakeholder furore was made on the basis of having a very large client base with existing defined benefit arrangements, but with many of these companies have employees which are not eligible for DB.

For Schroders, adding stakeholder to its repartee is seen as a valuable additional service for its existing client base, as opposed to the make or break effort it looks to be for life offices.

The main thrust of Schroders general pension capability is built upon Liberty. It bought Liberty International Pensions for £60m in May last year with the strategic aim of embracing the UK defined-contribution pension market.

At the time, Schroders described its new acquisition as a market-leading specialist provider of DC services.

With Liberty, Schroders acquired a dedicated team of over 50 people and an established customer service centre. It also provided an indextracking investment management capability available to defined-benefit and defined-contribution clients.

Its clients include charities, corporations, high-net-worth individuals, insurance companies, local authorities&#39 pension funds and unit trust holders.

Now, Schroders Pensions&#39 objective is to establish itself as a premier name in both the DC and DB pension markets.

At the time of the launch, Bates Investment senior analyst James Dalby said: “I do not see all the fund managers throwing their hats into the stakeholder ring because of the cap on costs. But I do not think Schroders will be the only one.”

But Schroders Pensions is clear it is not looking for business from just any IFAs. They are strictly only prepared to work with fee-based only, as well as working closely with employee benefit consultants.

Pensions director of business development Robert Noach has voiced his commitment for fee-charging over commission for financial planning advice, arguing that commission-based advice may taint the atmosphere and agenda of client dialogue.

He says the cultures of the two companies was not great and that, as Schroders had acquired Liberty for a specific strategic purpose, it was well placed to make the union work.


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