New IC Select Assessment Service Puts Trustees in the Driving Seat

Edinburgh, 3 December 2019IC Select service to empower trustees ahead of CMA Orders December 10 deadline

IC Select, the investment advisory specialists, has launched a new service that will for the first time allow trustees to measure the success of their investment advisors.

This service comes after years of mediocrity in investment advice and will finally enable DB pension scheme trustees to judge value for money. It also provides an independent, cost-effective framework that will allow them to assess the performance of their advisers against the strategic objectives. 

In addition, the new advisory oversight service will also allow trustees to benchmark the capability of their investment consultant against other firms, understand in detail the positive and negative drivers of their performance, compare their performance against other similar funds, benchmark the fees paid by their fund and assess the effectiveness and comprehensiveness of their quarterly reporting.

As the deadline for setting clear strategic investment objectives looms on 10th of December, stipulated by the Competition and Markets Authority (CMA) Review, IC Select has seen an unprecedented growth in demand for its services. One of the main things the CMA Review highlighted was the lack of necessary tools, information and insights readily available to trustees for holding their advisers to account.

Peter Dorward, Managing Director, IC Select commented:

“This IC Select initiative arises from unprecedented growth in demand for IC Select’s investment governance services. Partly on the back of stronger trustee governance and partly in response to the CMA requirement for trustees to set clear strategic objectives for their investment advisers, whether investment consultants or fiduciary managers.  

Setting strategic objectives is just the start of the process.  To be effective, trustees also require a framework to assess performance against these objectives.  The Pensions Regulator has already stated that having consultants mark their own homework is against the spirit of the orders.  This new oversight service provides the tools trustees need to assess how effective their investment consultant is in meeting their strategic objectives.

The new requirement to set strategic objectives, when combined with an appropriate framework for assessment, is a potential game changer, producing a virtuous circle of objectives, assessment and improving investment governance.  I believe that everyone recognises that what gets measured gets done!”

The CMA Review affects all DB pension schemes and significantly raises the bar in terms of investment governance for trustee boards and their advisers. The Orders will be enacted on 10 December 2019 and will shine a spotlight on investment consultants and fiduciary managers, allowing trustee boards to better judge whether the consultants are doing a good job and assess whether they represent value for money.

IC Select have been researching investment consultants and fiduciary managers since 2007 and are now recognised as one of the leading third-party evaluators.  In recent years, they have developed and launched the IC Select Fiduciary Management Performance Standard, before, earlier this year, transferring this to the CFA Institute for future development.  This is one of a number of initiatives developed by the firm to improve the effectiveness of their research and support the selection and oversight of investment consultants and fiduciary managers.  The firm now provides detailed research on all leading investment consultants and third-party fiduciary managers operating in the UK.  The new advisory oversight service has been developed throughout 2019 and trialled with a number of major pension schemes.

IC Select provide their DB clients with the necessary expertise and analysis to enable them to select the most appropriate investment consultant or fiduciary manager, then monitor them effectively based on their level of performance.

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Thursday, 04 June 2020