Many of these problems can be solved with the introduction of the IC Select Fiduciary Management Performance Standard.”

Roger Brown, Founder and Director of IC Select says:-
“We have been working with the major fiduciary managers over the last 12 months to develop this standard and are now excited to be receiving the first data from them. During the second quarter we will carry out an initial analysis of this data before feeding the results back to the fiduciary managers to fine tune the application of the methodology. We would then expect the information to become available to trustees later in the year.

This will put the trustees in control of the due diligence of the fiduciary managers they are assessing and removes any charge of ‘cherry picking’ of performance records by the managers. This is good for the trustees, good for the fiduciary managers and good for the industry.”

ENDS

Full details of the IC Select Fiduciary Management Performance Standard methodology is now available on IC Select’s website, www.ic-select.co.uk.

For further information please contact:

Peter Dorward, Managing Director
0131 221 6505
peter@ic-select.co.uk

IC Select, Forth House, 28 Rutland Square, Edinburgh EH1 2BW
Website: www.ic-select.co.uk
Tel: 0131 221 6505, Fax: 0131 221 6506.

Notes to Editors:

IC Select Fiduciary Management Performance Standard

At the heart of the IC Select Fiduciary Management Performance Standard methodology is the development of fiduciary management performance composites – fiduciary managers will group their client funds with similar risk and return characteristics, calculate the average performance of this grouping of funds and use this to present their track record. These composites are constructed and presented using the IC Select Fiduciary Management Performance Standard and will be available to trustees on request from the fiduciary managers when they are considering selecting a fiduciary manager for their scheme.

This provides trustees with many advantages:-

– any trustee board carrying out a fiduciary management selection exercise can request the performance information on the IC Select Fiduciary Management Performance Standard direct from the fiduciary managers.

– each fiduciary manager will have a list of core composites on different risk and return characteristics for the trustees to select from.

– as composites are calculated on average performance for a group of clients it prevents the fiduciary managers from reporting on only their best performing funds.

– when requesting performance information on the IC Select Fiduciary Management Performance Standard trustees can have confidence that performance has been calculated and audited on this industry standard basis.

– trustees can be confident that the information they are getting will be presented in a standardised format.

IC Select

IC Select 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

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

“The current issues with fiduciary management performance have been widely discussed over the last 18 months. The fiduciary management industry faces real challenges in providing performance information that helps trustees to determine the most appropriate provider for their scheme. This is leading to scepticism from trustees as to the value that fiduciary management on its own can bring to a pension fund.

These problems originate from each provider using a different methodology to calculate performance and risk, combined with a lack of transparency, standardisation and consistency in the way that fiduciary manager performance is presented to potential clients. This leads to accusations that managers are ‘cherry picking’ their performance record, and the provision of virtually meaningless information by fiduciary managers to trustees, when responding to prospective clients’ invitations to tender.

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