We’ve all seen the statistics say an active lifestyle can make you happier and live longer. What if we apply this same mind-set to your investments. Will an active approach result in healthy, long-term investments?
Being 'active' is not just about employing active managers. It's also a mind-set. With lower expected returns and market volatility likely to rise, being active on all fronts will be more important than ever.
At our latest Pension Conference we asked trustees about active management across different areas – asset allocation, investment managers, operational due diligence, governance, fees, ESG and risk management.
63% of people said they’re already active in asset allocation and 53% said they were already active in choosing investment managers, which is encouraging that such a large proportion of schemes are making active investment strategy decisions.
Trustees thought they could do more across governance, fees and operational due diligence. But, risk management is where trustees thought they should be doing the most and are currently not. These are all areas that trustee boards should be actively managing and each scheme will have a different focus depending on their member needs.
The largest portion of people thought they should be and wanted to be most active on ESG. It's a hot topic currently and we are seeing more trustee board time spent on this question.
Over future blogs I’ll look at each area in more detail, starting with the most active area noted by the trustees - asset allocation. In the meantime, ask yourself - how active are you?
Aon Hewitt Limited is authorised and regulated by the Financial Conduct Authority.