Operational capabilities of UK fiduciary managers’ survey

IC Select’s survey of the operational capabilities of fiduciary managers

This survey looks 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. The survey is based on the information received as part of our due diligence research of fiduciary managers.

Our main findings are:

· More than a third (or 36%) of fiduciary managers have their own framework for executing securities trades. This could save the average fund 0.22% a year in transaction costs.

· While fiduciary managers reported minimal operational disruption during the pandemic, there was a 174% increase in the total instances of control exceptions, or isolated instances of failings in operational controls, in 2020 compared with 2019, with 60% of managers reporting an increase.

· There is a lack of transparency around the disclosure of operational losses and payments made in compensation. Only 31% of fiduciary managers provided these figures.

· Less than a third (or 29%) of managers have a robust and prominent risk management framework.

· A fifth (or 20%) of fiduciary managers have in-house specialist teams to manage the transition of assets to their platform and also provide the service to third-party fund managers.

· More than a third (or 36%) of fiduciary managers have strategic partnerships with custodians and asset-servicing providers that are designed to foster innovation, reduce custody costs and mitigate risk.