Wealth Management Fund Share Class Innovation
Helping a top-three UK bank define an innovative, low-cost mutual fund share class for its pension and wealth management unit.
The Pickle
Our client, a top-three UK retail bank with a dedicated wealth and investment management division, launched a new workplace pensions and investments division.
The division was intended to provide new professional advice to employers and employees in respect of workplace pensions and the underlying investments.
Our client was seeking to devise and implement a low-cost default option pension investment fund and wanted to disrupt the market through its wide commercial banking relationships.
Our client had a problem with this approach as its proposition was not assumed to be able to be of sufficiently low cost to compete in a busy and price-sensitive regulated marketplace.
Our Move
Measuring
Working with our client, we analysed the bank’s in-house vertical fund management capabilities which ranged from investment management, fund management, portfolio management and more.
Documenting
We drafted a proposed new business model to show how our client could potentially secure the cost reductions.
This was via our making valid assumptions about our client’s vertical fund management efficiencies compared to its competitors.
Deciding
Our client decided to leverage its strengths and continued the project based on our analysis.
In looking for the cost savings required, our client devised further innovations in the design and construction of the new fund.
The Result
Our client’s main programme of work continued.
A strategic review of the new unit later concluded that the market opportunity had moved/changed and the unit was disbanded as being non-core to the bank’s requirements at that time.