Aon Hewitt has launched a fiduciary management service for small defined benefit (DB) schemes.
Fruition is an investment and governance service for trustees of schemes that have at least £5m of assets.
It defines investment objectives, provides hedging expertise and builds a portfolio in what the company describes as a “cost-effective way”. It also has the added benefit of reducing a scheme’s governance burden.
The company claims it is already seeing “considerable” interest in the service from its target market.
Aon Hewitt senior partner and head of European distribution Sion Cole said he and his colleagues are meeting demand for a fiduciary management service that meets the specific needs of smaller schemes.
“It’s clear that for schemes with relatively limited resources, an integrated approach – where they can work with us via a mix of services – works best.
“To meet their investment needs, we have designed Fruition which actively addresses the three big investment risks – growth asset risk, interest rate risk and inflation risk,” he added.
The service offers a diversified growth portfolio, which not only aims to generate returns but give greater certainty of outcomes. It also provides a liability matching portfolio, which helps the assets to move in-line with a scheme’s liabilities and thus decrease its funding need.
Cole said fiduciary management is no longer just for medium-sized schemes, but now larger schemes are deferring their investment decisions to professionals, too.
“For the smaller scheme, an adapted version of the established approach was needed to make it both effective for the members and economical for the scheme,” he added. “We have designed Fruition to meet those demands.”
