Investment Philosophy and Approach | Mercer

Investment Philosophy and Approach

  • #1

    Investment consultant by global Assets Under Advisement1

  • Whole-of-life

     Solutions provide a framework that enables the generation of adequate and sustainable incomes in retirement

     

  • Ranked #1

    "Investment Consulting Firm - Sustainable and Responsible Investing" category (IRRI Survey 2017)

Mercer Advisory Services

As a DC plan sponsor, you have diverse needs depending on your business size, your strategic focus and growth goals, as well as any evolving changes in legislation, regulations, and industry trends that could impact the needs of your plan participants. What worked three to five years ago, may not be the best approach for today or tomorrow. Our advisory services can help by providing a broad range of advice and counsel on ways to make better decisions on your retirement plans.

To provide your organization with the best advice possible, we leverage our world-class research that gives us the deep insights you require to move closer to your defined contribution plan goals. Our extensive research (both quantitative and qualitative analysis) highlights trends, macroeconomic issues, and other factors that ensure we provide the latest investment and retirement plan information to ultimately help you make better decisions for your retirement plan. As your plan evolves, we can be with you on the journey providing a continuum of services.

With more than 135 research professionals worldwide, and more than 5,900 fund managers generating investment ideas, we can help you in these ways: 

The Right Investment Approach Meets the Needs of Your Participants

Where appropriate:

  • Setting investment objectives and constructing robust model portfolios for all asset classes.

  • Providing advice on strategic asset allocations and customization needs.

  • Offering advice on emerging investment opportunities and themes. 

The Right Investment Approach Meets the Needs of Your Participants

Where appropriate:

  • Setting investment objectives and constructing robust model portfolios for all asset classes.

  • Providing advice on strategic asset allocations and customization needs.

  • Offering advice on emerging investment opportunities and themes. 

Defined Contribution Investing — A Look Through the DC Lens 

DC plans have become the primary source of retirement income for many workers around the world. With this trend, the focus has moved from legacy-defined benefit arrangements to offering best-in-class DC programs. As a fiduciary, that means you have to look for ways to improve the plan and facilitate the effective investment of your plan participant’s assets — that’s your top priority. 

It’s important to consider how the following constraints impact the investment strategies for your DC plan: 

  • Participants are the key decision makers, not the fiduciary. The fiduciary’s role is to control the investment options available to your participants and to assist in helping them make the best decisions possible. 
  • Participants needs are not uniform — some consideration should be given to minority participants. 
  • While fees and expenses can impair benefits over a participants’ working life, they should not be considered in isolation. We recommend targeting best net-of-fee and expense outcomes. 
  • Liquidity and regular (fair) pricing are key considerations; however, this does not mean that illiquid or less regularly priced investments cannot be accommodated as part of a fund offered to participants.

 

The Right Investment Approach Meets the Needs of Your Participants

Across a diversified DC participant base, we generally see the following groups and encourage fiduciaries to keep this in mind when structuring the plan line-up — this way you can respond to the specific needs of each group.

“DO IT FOR ME”

These participants rarely review the portfolio, aren’t engaged in the investment decision, and may prefer a default option that might include target date funds (TDFs). These are typically well-constructed portfolios with effective diversification and an asset allocation tied to the participants’ working lives. Intelligent diversification is essential to harvest multiple sources of return, and the investment strategy should be set according to risk tolerance and time horizon, among other considerations. At Mercer, we recommend a “whole of life” approach to solution design that looks at both pre- and post-retirement phases, including what happens at retirement.

GUIDE ME, LET ME DO IT

These participants have some engagement to being fully engaged in investment decisions. In some cases, they even want a full range of investment options. 

Investment Philosophy and Approach Insights
Stay informed with our take on the latest news and research impacting DC plans — with insights from our experts and thought leaders.

 

          Please See Important Notices For Further Information.

          1  Pensions & Investments. Pensions & Investments Survey, November 27, 2017. Please see “Important Notices” for more information on Assets Under Management and Assets Under Advisement.

         2 This information is as of June 30, 2018.

 

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