Professional Pensions has released an article looking at our recent findings and what this could mean.
To read the full article click here.
Investment Consultant Tenders in Sharp Decline
London, 21 May 2018 – Around 2.7% of pension schemes retendered for investment consulting services in 2017 – less than a sixth the proportion of a decade ago - according to a survey of 1,000 schemes, worth £697 billion, by oversight and selection specialist IC Select.
This is a marginal increase on the 2.5% of 2016 and 1.6% of 2015. But these proportions mark a sharp decline on 18.6% of 2008. Retenders have been bumping along at a low level over the three years despite growing scrutiny of investment consultant expertise and questions over the level of tender activity.
IC Select’s survey of schemes on their database also showed 1.5% of schemes ended up changing their consultant, against 11% in 2008, marking a steady decline over ten years. The changes stripped out scheme mergers, and entries into the Pension Protection Fund.
Peter Dorward, managing director of IC Select, said: “It is surprising the level of tender activity over the last three years has been so low. This follows the spread of de-risking plans, which has added to the complexity of investment affairs and, potentially, ties schemes more closely to incumbent advisers.”
An article in Pensions Expert which covers the benefits of engaging third party oversight of consultants and fiduciary managers with regards to fees.
To read the article click here.
This is the second in a series of short notes to be published over the next few weeks that explain how the IC Select Fiduciary Performance Management (FM) Standard works and how trustees can benefit from the information.
The IC Select Fiduciary Management Performance Standard was, as the name suggests, initially designed and developed by advisory firm IC Select.
Soon after the creation of the standard, a decision had to be taken as to whether this intellectual property should be exploited by IC Select to provide it with a competitive advantage in the selection and oversight of fiduciary managers - or whether it should it be developed as an industry standard.
This is the first in a series of short notes to be published over the next few weeks that explain how the IC Select Fiduciary Management Standard works and how trustees can benefit from the information. This note focuses on the background to the Standard. Subsequent notes will cover:
- Aligning the Standard with Trustees’ needs
- How performance is calculated
- Making sense of the composites and what to focus on
- Understanding the standardised performance information
- The impact of different methodologies for calculating liability benchmarks
- Full and hedge adjusted liability benchmarks
The FCA and CMA have highlighted that trustees are not receiving the necessary information to allow them to assess performance and judge value for money when selecting fiduciary managers. This is one of the areas that is currently being looked at in detail as part of the CMA’s Investment Consultants Market Investigation which will report its finding in July 2018.
These issues with fiduciary management performance are not new and have been widely discussed in recent years.