In a new service that is aimed to meet the needs of the rapidly changing needs of pensioners, the investment and benefits consultant Mercer has signed up three rival providers Standard Life, Friends Provident and Zurich, which can potentially create a new market segment and generate businesses worth billions of pounds for Mercer’s favoured funds.
Mercer’s new offering, a new workplace savings solution, aims to offer companies and their employees access to pensions and other workplace savings vehicles.
Mercer has developed a savings solution which enables employers to better manage cost and risk before taxation on pensions. Mercer will act as a ‘manager of fund managers’ and its main focus will be switching money between, debt, equity and property and decide on the fund manager. Mercer will not offer the last mile service of picking individual stocks.
Mercer’s solution allows employers to get access in a range of benefits for their employees such as pension, ISA, share plans, unit trusts and flexible benefits programmes.
Mercer will advice employers on the best suitability in terms of the services available on their platform for the workforce. The solution aims to manage costs and risk and bring on additional workplace savings vehicles rather than a pure pension plan.
The company does not aim to change the providers frequently, but if the fund managers fail to deliver in the long term, they may get replaced by another one.
As Mercer will act as the advisor for the scheme, the investment solution will contain best in class A-rated funds chosen by Mercer’s own worldwide research team. Mercer will monitor the performance of the fund managers quarterly, and if required monthly as well.
Mercer has already initiated discussions about offering its new service with three different companies in diverse sectors such as financial services, retail and media management in the UK.