DC assets to hit £1trn by 2020

Research undertaken by marketing intelligence provider SpenceJohnson, shared exclusively with schemeXpert.com, sees a huge growth of assets for larger schemes.

It estimates £360bn is held in DC assets – much lower than most estimates – but predicts 11% annual growth until 2020.

The current spread of assets is “heavily weighted” towards smaller schemes, the report estimates, with 49% in contract-based plans of fewer than 100 members.

However, it predicts the 12.5% share of DC assets currently held by schemes with 100 members or more will jump to 48.5% with assets of £658m.

The report also seeks to explode the “myths to end all myths” the DC market consists entirely of “open architecture” platforms for accessing funds.

It finds only 30% of trust-based schemes with more than 1,000 members, and 30% of group self-invested personal pensions of the same-sized membership, fall into this bracket.

The larger the scheme and more recent the arrangement, it concludes, the more likely a scheme is based on “non-proprietary funds”.

“Platforms in private admit they exert whatever pressure they can, including pricing, on clients to use their funds,” the report continues.

“But in the larger, unbundled schemes the consultants will usually ensure they make the decisions on what funds are used.”