Why fiduciary management?
Fiduciary management is one solution to the challenges facing pension scheme trustees and sponsors. The key drivers behind the rapid growth of this solution are; the need for greater expertise, increasing investment complexity, and limited trustee time - Sion Cole, Aon Hewitt
A combination of challenges means the pressures facing UK pension schemes have never been so great. With the focus very much on reducing risk whilst improving the scheme's funding position, the challenge is not only in choosing the right investment strategy for your scheme, but being able to implement this quickly and efficiently, evolve it over time and take advantage of opportunities as they arise.
The need for greater investment expertise is a key driver for a move to fiduciary management. With limited trustee time and increasing investment complexity there is more demand than ever for expertise to help bridge this gap. Fiduciary management provides daily attention and day to day management of the portfolio by a team of investment experts, who are focused on helping you meet your end-goals.
Increasing investment complexity
The range of investment solutions available has never been greater. There is also increased complexity within this. At the same time there has been significant market volatility and regulatory uncertainty. This all means greater pressure on trustee time and a growing need for expertise to help overcome these challenges and embrace the range of solutions.
Limited trustee time
Despite this increased complexity, the time spent by trustees on investment matters has not increased. In fact, it has reduced consistently over the last four years of our surveys. Trustees have limited time and have a huge array of topics to cover at meetings. This can lead to delays in the decision making process and hence missed opportunities to take advantage of favourable market conditions. In the current environment, even a one or two week delay can have a huge impact on funding levels, let alone over a three month delay. This makes fiduciary management even more applicable.
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Aon Hewitt Limited is authorised and regulated by the Financial Conduct Authority.