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quarterly fund performance review

Improving fund information for life and pension customers

We asked the independent consultancy firm, Square Mile, to undertake a quarterly review of the performance of all Old Mutual Wealth Life Assurance Ltd funds available to off-platform life and pension customers. The purpose is to identify any funds that have consistently underperformed over the past three years. This is in line with FCA best practice from their Finalised Guidance ‘FG16/8 Fair treatment of long-standing customers in the life insurance sector’.

In Q2 2019 the review identified eleven funds out of 600 in our life and pensions fund range as consistently underperforming.

Your clients may not be invested in any of these funds, however if they are, it may be worthwhile you discussing these findings with them to establish whether their current fund choices are still appropriate for their needs.

The most recent report is below.

 

Previous reports

The review will be repeated quarterly in order to identify consistently underperforming funds in a timely manner, and to communicate this to you and your clients. If your clients are invested in one of the underperforming funds they will also receive the most recent version of the report alongside their next annual statement.

You can view copies of all previously produced quarterly reports here.

 

Review criteria

We have reviewed the performance of the funds available to our life and pension customers against their appropriate ABI sector. The measures as to what constitutes consistently underperforming funds are:

  • 4th quartile in each of the last three consecutive discrete 12 month periods, and
  • 4th quartile on a three year cumulative basis.

Funds with less than a three year track record will not appear in the review. They will only be monitored by our Investment Committee as the report covers long-term underperformance and we do not feel this time period is long enough to be considered long-term.

 

Ongoing monitoring of funds

We have shared our review with each of the fund managers and, as you would expect, they take performance of their funds seriously and have assured us that they are working hard to address the issues that have caused the funds to underperform.

Where a fund has appeared in our report we will be working with the fund manager to monitor the fund for a period up to 12 months to ensure that its performance starts to improve. Funds we are monitoring will be detailed in the report.

If we take any further action regarding the funds, such as closing a fund that has not improved its performance, we will communicate this ahead of any action being taken.

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