3 April 2008
Key Advisers stake claim for schemes knowledge
In using key advisers to provide a comprehensive knowledge base rather than independent governance software providers, schemes risk exposing themselves to damaging commercial practices.
Most pension schemes are now realising the benefits of having a centrally hosted knowledge platform which also manages many scheme governance processes. The myriad of people involved in running a pension scheme, all from different organisations is fast making a centrally hosted platform a necessity rather than a luxury.
Most of the major pensions consultancies now work with independent governance software providers in some form to help their clients better manage their schemes and adhere to the TKU requirements.
Governance software has an important role to play within the industry. Put simply it can help schemes work better and at lower cost.
However, as more and more schemes turn to software to provide them with a better way of working, consideration must be given to who is providing these solutions and why.
Some pensions consultancies are now planning to offer some form of Governance Software – whether it be a simple document storage application or a more complex system to manage all aspects of governance. But is it good governance to obtain such a solution from your advisers?
Managing Director of eShare, Alister Esam commented:
“At eShare we use software to transform scheme operations and raise standards of governance. However, providers of such software must be independent from the schemes key advisers or the temptation to use the software to control the client could become too great?
There is a risk that key advisers could use the software and the knowledge and control gained to sell additional services. Further by becoming the holders of the knowledge base they may also make it harder for clients to move away from their services. Whilst integrated solutions often have benefits the one area we expect where schemes will want to avoid such conflicts is governance.
If schemes are tied to their adviser through the provision of a governance system it could potentially mean that the members are missing out on better deals from other consultancies, or worse that their own data managed by their adviser was misused to cross sell additional services.
In this day and age when people worry so much about their data and what is done with it, handing all your governance data to a conflicted supplier seems like madness – it’s like letting the children look after the biscuit tin.
Information needs to be held centrally so that it can be shared with all parties and people need to easily access the bits that are relevant to them but the provider of those services mustn’t be conflicted. To overcome the potential difficulties, independent providers should be used to bridge the gap between scheme and adviser – without compromising the schemes standards of good governance.”
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