Dorward added: “Given the heightened awareness of the need for more focused governance Trustees need to have a way to benchmark scheme performance – and fees – and the quality of the advice they are receiving against their peers, so they can see whether they are getting value for money.”

In April, IC Select launched a Fiduciary Management Performance Standard to help pension schemes compare the skills of fiduciary managers hired by trustees to make investment decisions on their behalf.

The standard is backed by 14 providers including the “big three” investment consultants, Mercer, Willis Towers Watson and Aon.

The survey coincides with an investigation of investment consultant activities by the UK Competition and Markets Authority, which started in November 2016.  The results of the review are due to be published in July 2018.

 

For the pdf version: click here. 

 

For Media Enquiries:

Mike Foster

Montfort Communications

+44 (0) 203 770 7915

foster@montfort.london

 

For further information please contact:

Peter Dorward, Managing Director

0131 247 7439

peter@ic-select.co.uk

www.ic-select.co.uk

 

Notes to Editors:

Chart 1 shows the percentage of clients that retendered their consultancy services and the percentage that changed consultant firm in each year.  The clients that changed consultancy firm is adjusted for clients lost as a result of schemes entering the PPF and schemes merging.  This data shows a clear decline in the amount of retendering activity in recent years.

Chart 1: % of advisory clients retendered and changed consultant

 

 

Changed

Retendered

2008

11.0%

18.6%

2009

8.4%

16.3%

2010

4.5%

9.0%

2011

4.0%

6.6%

2012

2.9%

4.3%

2013

3.3%

5.2%

2014

2.8%

4.1%

2015

1.0%

1.6%

2016

1.3%

2.5%

2017

1.5%

2.7%

 

IC Select

IC Select, the oversight and selection specialist, specialises in helping pension funds select, monitor and review investment consultants and fiduciary managers.  The firm’s assessment capabilities leverage on its unique positioning:

– Wholly independent

– Free of conflicts

– Research led

– Focused on assessment from an investors’ and investment perspective

IC Select is a wholly independent organisation and is placed in a unique position amongst third party evaluator firms, as the only organisation that is able to conduct in depth research of both the advisory and delegated investment services of the major investment consultants, as well as other fiduciary management providers.  By not competing with these firms, IC Select has unparalleled access to detailed information not available to other third-party evaluators.

As a result, trustees can be more confident in the quality of their investment decisions and are able to enhance their scheme governance.

 

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.”

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