How much will it cost me?

Fiduciary Management for UK Pension Schemes

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Whilst fees are by no means the key selection driver, they are always an important issue for clients and the service should deliver value-for-money. A good fee structure not only acts to align the interests of the client with that of the fiduciary manager, but also serves to incentivise the manager. The spectrum of fiduciary manager fees can be radically different.

It is important for the client to understand the fee structure and the underlying cost drivers. Under fiduciary management, a client’s focus becomes less about achieving a target return and more about achieving a target funding level within a certain risk framework. Fiduciary managers, as a result, tend to have a greater focus on risk and the schemes liabilities, making performance-fees which are linked to the funding level a possibility.

Fee structures need careful examination so that the level of fee is consistent with the level of value added by the active, not passive, decisions taken by the fiduciary manager.

Alignment of fees with value added Charts: Alignment of fees with value added
Click chart to enlarge.