Benefits of fiduciary management
The primary aim of fiduciary management is to achieve a scheme's long-term objectives in a risk-controlled, timely and cost effective manner
The potential benefits of fiduciary management are extensive for schemes of all sizes as solutions can be tailored to scheme specific requirements.
Trustee time freed up to focus on strategy
Using a fiduciary solution will enable trustees to step back and focus on the strategic decisions of the scheme while the investment strategy is implemented and managed by experts on a daily basis. The strategic decisions and investment guidelines will be agreed at the outset by the key stakeholders and the fiduciary manager. Trustees remain in control of their strategy.
- Enhanced diversification of growth portfolio
- Improved matching of liabilities
- Smoother, more certain route to your objective
- Trustee time freed up to focus on investment strategy
- Capture opportunities and lock-in gains
- De-risking triggers to reduce risk and volatility
- Actively managed, evolving portfolio
- Improved risk management and operational due diligence
Enhanced diversification and better liability matching - means a smoother, more certain route to your end goal
Fiduciary solutions typically offer better diversification of the growth assets and improved matching of any unrewarded risks (ie, interest and inflation risks) which will ensure smoother and therefore greater predictability of return. This should result in a potentially quicker, and more certain, route to your objective whether that is self sufficiency or buy-out.
De-risking triggers to reduce risk, lock-in gains and capture opportunities
Frequent monitoring of a scheme's flight plan and de-risking triggers will help to reduce the risk and volatility associated with the scheme. It will also ensure that opportunities to de-risk are captured and implemented efficiently and with clear accountability. This ability to monitor funding levels on a frequent basis and then implement switches quickly means trustees can be confident of not missing an opportunity to lock-in gains as funding levels improve.
Cost effective solution
For smaller and mid size schemes, the combined buying power of these solutions would provide access to top tier managers and opportunities at discounted rates that would otherwise not be possible.
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Aon Hewitt Limited is authorised and regulated by the Financial Conduct Authority.