Photo of Mark Slaviero, Mattioli Woods accepting on behalf of Nathan Imlach, with Suzanne Burgoyne, Lloyds Bank.
A pension consultancy and wealth management services provider, Mattioli Woods holds over £65m in more than 3,000 bank accounts for the company and its clients. With interest rates remaining low – and no obvious sign of improvement in these rates in the near future – the option of offering clients an attractive rate had become increasingly difficult for Mattioli Woods. Therefore, the company was looking for a solution which would increase the interest income on its customer accounts.
Nathan Imlach
Finance Director
Mattioli Woods is one of the UK’s leading providers of pension consultancy and wealth management services, advising over 4,000 clients throughout the UK and with assets under advice and administration in excess of £3.02 billion.
in partnership with
Mattioli Woods negotiated a tailored arrangement with one of its long-term banking partners, Lloyds Bank, to structure client pension accounts so that they could offer better and more competitive rates for their SIPP and SSAS pension schemes. Under the new bespoke structure, the company’s accounts were re-classified as retail-like funds, which generally attract a higher rate of interest than corporate accounts. In order to do this, the bank had to first secure approval from its retail pricing committee.
As a result of this re-classification, Mattioli Woods now benefits from a higher rate of return, some of which is passed on to the company’s customers. This makes the rates offered by Mattioli Woods more attractive than rates offered by many of its competitors. The new structure has also resulted in a lower administrative burden for Mattioli Woods, as processes have been streamlined and cost savings have been made for customers.
Sales and Marketing Director at Mattioli Woods, Murray Smith, explained: “In today’s environment of lean interest rates, the inescapable challenge for Mattioli Woods has been how to maintain a competitive edge in the pricing of more than 4,300 pension schemes we manage for clients.” “In general, banks don’t offer pension fund clients the rates available to retail customers. We have managed, however, to work with our banking partner to re-classify client deposits as retail rather than wholesale. This allows us to offer our clients better rates than many other pension providers can access,” adds Smith.
The decision to re-classify the funds was an innovative approach to a contemporary issue which many businesses are currently facing. This ground breaking tactic was made possible by Lloyd’s interpretation of the Individual Liquidity Adequacy Standards (ILAS). This approach was tailored to the company’s specific business practices and would not have been suitable for all pension providers. Unlike many other pension providers, the client accounts held by Mattioli Woods are classified as ‘own name accounts’, where the member is co-trustee and is required to approve transactions made on the accounts. This was a key factor in determining the best solution for the company.
The custom-made solution has proved so successful that Mattioli Woods has decided to move funds held with other banks to Lloyds. There may also be opportunities to improve the benefits of the solution in the future; once the overall balance of the accounts reaches £100m, an even higher interest rate may be applicable.
As a result of the approach taken with Lloyds Bank, Mattioli Woods has been able to benefit from a higher interest income across its own name accounts, which has led in turn to improved customer satisfaction, a reduced administrative burden and cost savings resulting from efficiency improvements.
