Wot no DB Admin?
It has, without doubt, been an interesting week in the DB Administration market. The announcements from Aon and L&G about their plans to exit significant parts of their administration portfolios, leaves me thinking that something is surely afoot. Those of you who know Cosan will be familiar with our point of view on administration matters. We empathise with the Providers and understand the challenges they face. Their shareholders demand margin growth and greater market share whilst at the same time, clients want service improvements, improved data and better governance. The administration industry has also suffered from years of chronic under investment driven by short termism, the 3-5 year ‘churn’ of contracts and a ‘hair trigger’ approach when it comes to procurement reviews. Against this backdrop, is it any wonder that some Providers are starting to say ‘no thanks’ we have better things to do?
Before we all start to get too depressed though, I am pleased to report that there is some great stuff going on out there! One of the joys I have experienced since ‘crossing the wire’ from Provider to Advisor, is to get to know more about the broad range of administration solutions that are on offer in the market. Another has been building relationships with some of the TPA’s that really do deliver excellent levels of service and customer care. These firms still have a vision and strategy for ‘administration excellence’ (on a stand alone or bundled basis), that is borne out of a desire to truly support scheme members as after all, that’s what it’s all about isn’t it?
The existence of these kind of administration providers is heartening to say the least. It shows that innovation and creativity are alive and well in our industry. It also evidences that administration doesn’t necessarily only work effectively ‘at scale’ or that service improvement can come only about at a glacial pace.
So despite evidence of an increasingly polarised and selective Administration market, those clients, Trustees and Scheme members affected by recent Provider withdrawals should take heart that there are some great alternatives still out there. The key is to find them and then work in partnership with them for long term success.