The Pension Plowman published this blog earlier today and mixed up his Allan Whalleys. The Allan Whalley chairing this committee is not the former Mercer/WTW head honcho but the independent trustee and Group Pension Director of Smiths Group. Apologies to both!
Mr Grace you should have been alive in such an hour!
The IGC has been assured that BlackRock do all they can to reduce these costs and that these are lower than average for each fund compared to similar funds elsewhere. Therefore, the IGC considers this an aspect of good value for money for your policy.
So opines BlackRock IGC’s chair Alan Whalley on the performance of the BlackRock workplace savings plans under his oversite.
Black Rock are one of the word’s largest asset managers having taken over the funds of Barclays Global Investors. BlackRock have been trading in the UK as Mercury Life, Merrill Lynch and the investment administration and record keeping systems they use have previously been trading as PensionStore, Liberty, Schroders and Investment Solutions.
BlackRock as asset managers have not always been considered to have given value for money, in 2013 they were caught with their hands in their policyholders pockets over its rather less than transparent policies on stock-lending. You can read all about this here.
Back in the day, BlackRock trouseredup to 40% of the revenues generated by “stock-lending” to other institution’s prompting Alan Miller to comment
‘Esma needs to show BlackRock that even though they are a big player this does not prevent them from following the spirit of the rules and if necessary BlackRock’s ETFs and other funds involved in securities lending should be banned by Esma in describing themselves as UCITS funds,’
From my work with Novarca, I am comfortable that BlackRock funds are well managed and that costs of trading are kept to a minimum by brilliant execution. But that does not mean that members get good value for money, as this article points out.
I was looking forward to some tough investigation by the IGC on this subject – hopefully confirming that all has been put right. Instead we get this as a conclusion.
We are not complacent and where we identify areas of potential improvement we work with BlackRock to implement solutions. We are pleased to report that so far we have not needed to raise any concerns that affect the membership or policyholder
Well I’m sorry but I don’t think that any organisation provides a service so perfect that it cannot be poked in the ribs a few times and having worked with BlackRock as an adviser and as the owner of the platform on which they manage money (DC Link as was) , I can assure policyholders that there is considerable scope for improvement!
BlackRock are not assessed by our Pension PlayPen platform as they only offer their services to large employers who don’t need our cheap and cheerful offering. First Actuarial research BlackRock and yes- their offering is good. We have heard nothing but good about the support BlackRock offer to large employers using their workplace pension for auto-enrolment.
But IGCs are not here to tell us everything in the garden is rosy, they are here to make the garden more rosy and to do some digging to make sure that the ground that looks so fertile isn’t infected with Japanese Knotweed.
Frankly I can’t see what the BlackRock IGC has been up to over the last year and I see no attempt in this statement to raise standards. If Alan Whalley, Colin Richardson, Adrian Lawrence, Paul Bucksey and Claire Altman (all of whom I know to be good people) want to see me after school- I’d be delighted.
I’d be happy to kick a few tyres , show them where a few bodies are buried and generally chew the fat. Once we’ve got past the cliché stage, I’d be prepared to ask them the searching questions about BlackRock that they appear to have chosen to ignore.
My assessment of the IGC statement is as follows
- The position the IGC was adopting to value for money, and in particular, the assessment of value for money benchmarked against best practice gets an amber – it could have been a red and will be next year unless performance picks up
- The tone of the document is avuncular (as befits Allan) and though it lapses into consultancy speak from time to time, the document is a good read. For tone, I’ll give it a green
- Its capacity to address specific issues with the provider where member’s issues might be prejudiced gets a red, this report reads plain lazy and unless I am convinced to the contrary, I reckon that whatever the committee were paid last year was money for old rope.
Thanks to Stephen Budge of Mercer for passing me a PDF of the Chair’s statement. He’s now sent me the link to the statement itself. I must say- that Steven Budge knows how to find things!