Would I benefit from fiduciary management?

Fiduciary Management for UK Pension Schemes

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In a fast moving financial world, a major challenge for UK pension schemes is to be able to make informed decisions, quickly and efficiently. Increased delegation can be of significant help to trustees that are resource constrained – be that of their own time and knowledge or in the resources available to them – in totality sometimes referred to as the scheme’s “governance budget”.

A common comment from trustees is that they are unable to devote sufficient time and resource to support the level of investment sophistication that they are looking for in their schemes. This has never been more true with complicated derivative structures and de-risking mechanisms becoming increasingly common.

Investment sophistication equation

From the perspective of the corporate sponsor there are additional benefits to fiduciary management. The knowledge that investments have been delegated to an expert (the fiduciary manager) can give the corporate director additional comfort that their pension obligations are being managed effectively.

While fiduciary management is not the answer for everyone, it could be the answer for schemes where the governance budget is struggling to keep pace with investment sophistication levels.