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Fiduciary Management - Delegated Investment Survey


Aon Hewitt Delegated Investment Survey 2013

Delegation is one of the most important changes to have occurred in the UK defined benefits pension market in recent years.

The fourth annual Aon Hewitt Delegated Investment Survey, covering an estimated 13% of the UK defined benefits pensions market, is essential reading for anyone involved with pensions. Its unique scale and history allow pension schemes that have already delegated their investments, as well as those exploring delegation, to identify issues they might want to consider as the market develops.

This survey tracks the growth of delegation against the background of increasing use of flight plans, pension scheme closures and a rise in diversification. It also identifies the attractions of delegation, notably the investment expertise that it delivers to pension schemes. This year our report highlights four themes:

Strong growth in demand for delegation
Pension scheme trustees are turning to delegation in increasing numbers. 36% of respondents say trustees have appointed a delegated provider, up from 29% in 2012 and 18% in 2011. These figures demonstrate strong growth in demand for delegation.
Delegation meets changing needs of pension schemes
We highlight three key changes that are correlated to the increased use of delegation: widespread use of flight plans (which are systematic approaches to changing risk levels), continuing scheme closures and a rise in diversification.

Time constraints addressed by delegation
Two-thirds of respondents say trustees spend no more than five hours a quarter on investment. Many trustees find it difficult to deal with detailed investment topics within the confines of quarterly meeting schedules. Delegation provides a solution in the form of 'always on' professional investment management, ensuring day-to-day decisions are made and implemented promptly.

Expertise is main advantage of delegation
This survey shows that the expertise that professionals bring to bear on portfolios is seen as the main advantage of delegation. Against the background of low gilt yields and soaring liabilities, funding level volatility and low economic growth, trustees are having to deal with many complex investment topics, including hedge funds (held by 45% of respondents) and liability-driven investments (37%).

Sion Cole and Ian Bailey look at the key findings from the 2013 Delegated Investment Survey



Please click here to complete a short form and download a full copy of the 2013 Delegated Investment survey. Alternatively please click here to download a copy of our survey summary.

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