Within the UK lifestyle strategy growth elements typically consist of 100% equities, resulting in greater capital risk than most members appreciate. Phasing assets and structures utilised in the run up to retirement (sometimes referred to as the ‘glide path’) are also often inappropriate, failing to meet members’ conversion expectations or requirements.  

The implementation as well as the design of investment strategies need to be considered. Inability to mitigate out-of-market positions (e.g. as part of lifestyle strategy phasing, fund rebalancing, member switching or scheme restructure) can create significant risk.  

Many schemes have moved from active to passively managed funds to reduce costs and minimise manager risk. However, in doing so sight has frequently been lost of the importance of asset allocations and of ‘net returns’ (performance less costs).