Indeed, pension plans increasingly require a holistic, cross-balance sheet understanding of risk in order to structure portfolios and implement de-risking solutions.

This has become all the more important in the current pensions environment; assets and liabilities are changing in more complex ways and being impacted by more factors, making effective risk management far more challenging – and connecting assets and liabilities crucial.

This comprehensive view can also facilitate improved coordination and collaboration between stakeholders, resulting in a step-change for advisory services. Technology platforms can act as a hub through which all parties can see consistent and relevant information across both the asset and liability side of pension plan risk management.

This allows plan advisors to be fully informed and aligned in their dialogue with clients, facilitates brainstorming, and real-time, enriched conversations about investment strategy and modeling various scenarios – allowing a more holistic offering to be presented, and the end-to-end process to happen substantially faster.

For a DB administrator providing actuarial services, for example, collaborating effectively with a plan sponsor's investment advisor is particularly valuable to implementing dynamic asset allocations. For instance, a plan actuary may pre-load relevant liability information, while looking to the investment advisor to provide what they consider to be the target asset allocation.

Strengthening client engagement

This kind of industry-changing technology can also help drive closer collaboration among actuaries, plan sponsors, and their advisors. Many platforms exhibit user-friendly capabilities, allowing live, on-screen demonstrations to be performed in client meetings to more clearly highlight how different investment strategies can impact their portfolio, structuring a number of glide paths for review and analysis.

New technology platforms make this information clearer, streamlined, more concise, and more sophisticated when presenting to the end client. This portability creates the opportunity to easily illustrate portfolio positions and fuels greater engagement with clients.

Providing clients with a better understanding of the interaction between assets and liabilities – as well as demonstrating the short- and longer-term impacts of de-risking, or a market event on the risk profile – can, in turn, help to ensure the most effective solutions are implemented.

This is a key step in helping plan sponsors to reduce funded status volatility, assess risks associated with large unexpected contributions, and ultimately strive toward fully funded status.

Certainly, it is important to provide a holistic service to clients – a combination of effective technology and a forward-thinking, client-focused experience.

Furthermore, the industry is increasingly recognizing the substantial value of enriching discussions and relationships with clients and their investment partners – and the importance of technology in driving that forward.

With the pensions landscape becoming more challenging to navigate, it is more important than ever that advisors and asset managers can help clients identify what their needs are, and how to meet them, effectively and efficiently.

Equipped with the right technology tools, advisors and asset managers can deliver enhanced capabilities that can help ensure their clients are positioned to harness opportunities, and optimize their investment strategies.

Bob McBride is Vice President of Retirement Solutions at Transamerica.

Shawn Carlson is Consulting Actuary at Transamerica.