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Professional Pensions Article: “IC Select: FMs hit by glitches in 2020 despite claims”

The findings come despite widespread claims by fiduciary managers that they suffered minimal disruption in 2020 when the Covid-19 pandemic forced virtually the entire sector to start working from home.

In its survey, IC Select looked at every aspect of a fiduciary manager’s operational capabilities – from the way it executes securities trades on behalf of a scheme to its handling of data, systems integration and approach to managing risk.

IC Select defined a control failure as an instance where a so-called statement of operational control (SOC) report – which independently assesses a fiduciary manager’s operation control framework – contained an exception or qualification that describes a specific case of processes going wrong. This could include a temporary IT outage or delays in processing a transaction.

The firm found that 64% of fiduciary managers failed between 2% and 5% of the tests carried out in the compilation of a SOC report, while 29% failed fewer than 2% and 7% failed more than 5%.

 

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This article was published in Professional Pensions, bJonathan Stapleton | January 25, 2022

More than three quarters of the fiduciary management industry endured control failures in 2020 despite their claims that operational processes ran smoothly in the thick of the pandemic, IC Select finds.

The oversight and selection firm’s survey on the operational capabilities of fiduciary managers found that 77% of fiduciary managers suffered an increase in instances where their operational controls or processes went awry at the start of the pandemic.

The total number of specific failures surged by 174% in 2020 compared with the previous year, it found.

 

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25th January 2022