Radical Thinking Matters

If you’ve seen a strategy shift or transaction involving a UK pension that’s really made you sit up and take notice, the chances are Redington has had a hand in it at some point. The Philips UK pension’s innovative “umbrella” buyout and National Grid’s sale of its in-house asset manager are just two examples. Co-Founder Robert Gardner tells CIO why radical thinking matters.

CIO: Does it worry your clients that Redington is often so radical in the changes it proposes?

Robert Gardner: Most people find themselves in a situation because of status quo bias. The question to ask is, “Where are we heading as a pension fund?” In that world you’re heading for, do you need an in-house asset manager? And in that world does the asset manager—as it is set up today—have the right people with the right skills and mindset to deliver?

Success is not running an in-house asset manager. Success is making sure that the deficit gets funded and all the members get paid. 

CIO: If you have a large in-house team for strategy and investment, what can a consultant add?

Gardner: Some of the biggest pension funds struggle with the question of what they are trying to achieve. When they ask us for help, it’s about thinking long term and setting the context for change rather than the details of implementation. If you’ve spent 20 years training as an actuary, or in manager selection, or asset-liability management, it’s very hard to think of the big picture. The ability to zoom in and zoom out, the ability to go from context to content and back again is a skill that’s rarely taught at school or university. Unless you’ve gone out and trained yourself in it, it doesn’t come naturally.

CIO: What’s going to shake up the pension industry next?

Gardner: At Redington this month we’ve just rolled out personalized default funds for all our staff. We think we’re one of the first UK companies to do this. I said this was planned at a conference last year and an asset manager came up to me afterwards and said, “I don’t think that will happen.” 

That was October last year. We now have personalized default funds that are contextually relevant to you at each point of your savings and investment journey. Next year, if you get married or you get a pay raise or you buy a house, your default fund will change. That’s the future. This is just the beginning.