We hear a lot about the administration market and the parlous state it supposedly finds itself in. We also hear that there is a dearth of good quality administration and we do see some poor‑quality administration whilst we’re helping trustees to fix it or find a new administrator. But neither of these truisms reflect the market. And doesn’t doom-mongering and naysaying have a consequence? Trustees will not move administrator but, instead, find themselves stuck with sub-par service for their members. Is it really better the devil you know?
Firstly, there has been consolidation in the market and there are some administrators addressing issues needed to deliver a quality service across the client base. Many in the market have also become more selective about the opportunities they will pursue.
But none of these mean that the administration market lacks choice or quality. A selective approach to new opportunities is a sensible way to control growth, manage capacity and maintain quality for existing clients at a time when the market has been busy with transitions.
The market remains competitive. There may now be one or two who drop out of a selection process. That is fine. Why would you want someone to bid, if that bidder doesn’t think the opportunity is a good fit with their culture, approach or target market; or if they cannot meet your timescales without compromising quality either for you or their existing clients. High quality bids are still being submitted on tender exercises. It just may not be the same five firms it has been over the past five years.
Secondly, there is quality administration to be found if you know how to access it and then partner with your administrator to deliver it. Leaving administration parked on the shelf and expecting it to work is a recipe for poor quality. A robust selection exercise will tease out differentiators between bidders and identify those that will best meet your requirements and work in partnership as the scheme progresses through its journey. A good transition, with agreed deliverables, a strong governance structure around it and a sensible timescale will help set the service up for success. Ongoing oversight will help ensure it then continues to deliver to your members’ needs.
The number of schemes changing administrator has seen some of the smaller or niche players up their game and grow their client portfolio. This has tested them, but they have, on the whole, delivered for clients and seized the opportunity to increase their profile, reputation, experience and size.
There is actually more evidence of quality administration and competition in the market now than before, so perhaps it isn’t better the devil you know after all.