Royal London Asset Management CIO Will Nicoll explains why the firm adopts a client-first approach and why the old ways are still the best.

By Pete Carvill, Insurance Asset Risk

Insurance Asset Risk (IAR): Congratulations on winning the award for fixed-income manager of the year. How does it feel to have won this twice?

Will Nicoll (WN): It's always lovely when the team picks up an award like this. It shows to them how their hard work is understood, along with their professionalism, and how they are regarded in the industry. They work very hard all year for our clients, so we're delighted to pick it up.

IAR: What is it about your working that you think sets you apart from your peers?

WN: I think the obvious thing to point out is our performance, which I think has been very good over the last ten years. But what we also do, which I think is very important, is that we listen to our clients. We're honest about the fact that we don't know every answer, so we try always to find out what they want to achieve. It also helps that we're a mutual so we're not answerable to our shareholders, but entirely to our clients. Instead of just focusing on the next quarter's numbers, our work is about building long-term relationships with the people we work for and making sure that they're happy.

IAR: Is there a common theme, or themes, amongst clients about what they want?

WN: It's the same thing, always—stability, plus someone to talk to who will react to what's needed. People also want to see some flexibility. If you put those things together, that's how you build long-term relationships. It does take a while to build these things, but when you put the effort in, you're helping to ensure that those clients are still going to be with you in five or ten years' time.

IAR: We've seen a huge shift in the landscape in recent years, as the number of pension schemes looking for services such as yours has 'declined', while the number of insurers looking for the same thing has increased. How does your approach differ between the two?

WN: The most important thing, always, is making sure that you have a plan in place for a client that is appropriate for their needs. You will always find that different schemes, and we're talking about pension schemes here rather than insurers, will have different challenges to overcome. Some are nicely funded and therefore are looking at long-term debt that matches their liabilities. And then there are others that are a long way from being funded, so you're looking to increase the risk that's being offered to them.

IAR: This would be for DB schemes. How do DC schemes compare?

WN: With those, it's important to know the age of a pensionholder—whether they're 20 years old or 50 years old, because that changes things. And it's why you get a proliferation of different bond options because you are adjusting for risk or the time horizon.

IAR: How will you continue to improve your investment offering over the next year?

WN: We think our performance has been good, and that they'll continue to remain that way. But one area we're going to explore is expanding the capabilities that our clients want. Right now, we do ABS and emerging market debt, along with investment grade and high-yield products. We're going to look now at adding more capabilities.

IAR: Have you made any moves yet in that direction?

WN: Yes. We just bought an infrastructure equity business that produces long-term predictable income. All of this helps us be as diversified as our client base wants us to be.

IAR: Is there anything else?

WN: We're also looking at how the market is changing. We've seen a lot of buyouts in the last two years, so we're interested in seeing whether that carries on or whether schemes are going to try and avoid that going forwards. Again, it's going to come back to the simple discussion of listening to our clients and knowing where they want to be and what they want to achieve.